Endowment and repaid mortgage

rgriffiths_3

We took out various amounts in mortgage starting in 1977, a second traunch in 1982 and a third one in 1993, totalling £50,000 with the Halifax Building Society. All these were low cost endowment martgages of which the first portion has matured been repaid and exceeded the iniail mortgae amount. The othe rtwo are yet to mature. We re-paid the total mortgage off in 1998 so the endowments are still running as a form of sving. The projections on their maturing values fall short of what we would have needed had we not paid off the motgage. Does anyone know if we still have a right to claim ?

EdInvestor

Yes, you have but the redress will only be caculated up to the time the mortgage was paid off, and at that point it's unlikely you would have been worse off, and thus you would probably get no redress.

It might be a good idea to replace the endowments with something better for your savings now though.

dunstonh

Everyone has a right to claim. However, it is unlikely you would get anywhere with your complaint.

If a complaint is upheld, the redress is calculated for the period you held the endowment for use against a mortgage. That means yours ceased in 1998. The stockmarket crash and problems didnt start to occur until 2001.

You cannot complain about the first endomwent as that has matured with a surplus (do you want to hand the surplus back?). The second one is likely to result in no finanancial loss as LAPR tax relief on the premiums would have made that much cheaper than a repayment mortgage and its probable that a 1982 plan was not branch staff sold meaning it is possible it would fail under the pre April 1989 rules). The 1993 plan was only held for 5 years and a repayment mortgage for that chunk over a 5 year period wouldnt have repaid much of the capital plus those were high interest rate years and thats when endowment mortgages were at the cheapest compared to repayment mortgages.

So, in summary the 1993 case is realistically the only one you can complain about and given its very short life and your repayment in 1998, its not likely to amount to much, if anything.

dreamylittledream

dunstonh wrote:

Everyone has a right to claim. However, it is unlikely you would get anywhere with your complaint.

If a complaint is upheld, the redress is calculated for the period you held the endowment for use against a mortgage. That means yours ceased in 1998. The stockmarket crash and problems didnt start to occur until 2001.

You cannot complain about the first endomwent as that has matured with a surplus (do you want to hand the surplus back?). The second one is likely to result in no finanancial loss as LAPR tax relief on the premiums would have made that much cheaper than a repayment mortgage and its probable that a 1982 plan was not branch staff sold meaning it is possible it would fail under the pre April 1989 rules). The 1993 plan was only held for 5 years and a repayment mortgage for that chunk over a 5 year period wouldnt have repaid much of the capital plus those were high interest rate years and thats when endowment mortgages were at the cheapest compared to repayment mortgages.

So, in summary the 1993 case is realistically the only one you can complain about and given its very short life and your repayment in 1998, its not likely to amount to much, if anything.

As the mortgage was redeemed in 1998 prior to the stock market crash its unlikely the OP would have been aware of risk at this time.

Therefore the calculations would also have a refund of the premiums paid between 1998 to now as part of the redress as well as interest on the capital loss between 1998 and 2006

http://www.financial-ombudsman.org.uk/publications/guidance/mtge_endowment_redress_cs.htm

Case Study 6...

Therefore it could well indeed be worth claiming for the 1993 policy

It is however fairly likely the 1982 policy would show no loss (and indeed is likely to mature at target amount short of a really disasterous fund performance)

dunstoh - it would be nice if you could at least quote the correct methodology when attempting to put pople off from making complaints.