Mis-sold Mortgage compensation guide lines

dunstonh

As in the above quote, I thought it was the government or regulator at the time that told the insurance companies what rates to use in quotations. Am I right ?

The projection rates were set by the regulator and not the financial services companies. In the early days, the rates used were actually lower than past performance figures but appear high by todays standards. The change in the economy and the impact of other changes reduced headline returns much more than was anticipated. No-one ever dreamed we would be in the position now.

The good news is that had the old economy continued we would have all been worse off financially despite the endowments hitting targets and paying surpluses.

Leon_W

Thanks. As I thought then.

You cannot therefore heap all the blame at the door of the actual provider if they were told to quote these figures by the regulator. In theory it was probably a good idea as it stopped company one upmanship ie:NU quoting 10% only to be pipped by Standard Life quoting 15%. In practise it didn't quite work out as you forced the more pessimistic companies to quote figures that they thought unacheivable.

As I have stated on other threads, I believe that if endowments had gone the other way and performed spectacularly well with people being able to repay the mortgage and buy a new caravan, there would have been a raft of complaints from people on repayment mortgages, "well you never explained the benefits of endowments properly". Can't win sometimes.

EdInvestor

SPANNERS wrote:

Some figures:-
There are two policies involved, both taken out in 1991
The estimated shortfalls are (as per notification recd 2004):-
Nor Union £9,400 on an expected maturity value of £25,000 @5.0% predicted
Std Life £12,600 on an expected maturity value of £29,000 @5.7% predicted

Nor Union monthly premium is 36.45
Std Life monthly premium is 41.54

Both policies mature in 2016
Motgage amount to be realised in 2016 - £54,000
Current interest paid is 7.14%pa

You need to update the surrender values to today's level so we can see the current postion.Just phone the companies up and ask the new value.

PS. If I were you, I'd accept the redress offer, as it could well be that you don't have much of a shortfall any more and if you complain, the offer will be reduced