Halifax Mortgage/Norwich Union Endowment

FarForest

We have a combination of the above, which we were told in 1993 was a better way of paying for a mortgage than the repayment mortgage we then had. This was by the Mortgage Advisor in the Leeds Permanent BS, which later became the Halifax. He illustrated how not only would we pay off the mortgage at the end of the 15 year term, but we would also have a handsome sum over - OK you've heard it all before.

Two things:
1. As we cannot locate any paperwork from that time, is there any course of action open to us?

2. I keep seeing that Norwich Union should be sending out coded letters, Green and you're OK, Amber and you're on a sticky wicket, Red and you're in the brown stuff. All we ever receive is the annual statement that isn't coded, but looks to me that it is going to fall short next year. Anyone able to suggest what this lack of info means and what we should do next?

Thanks in advance.

dunstonh

1. As we cannot locate any paperwork from that time, is there any course of action open to us?

You can still complain. It is upto the advising company to prove that you were given the disclaimers and risk warnings.

2. I keep seeing that Norwich Union should be sending out coded letters, Green and you're OK, Amber and you're on a sticky wicket, Red and you're in the brown stuff. All we ever receive is the annual statement that isn't coded, but looks to me that it is going to fall short next year. Anyone able to suggest what this lack of info means and what we should do next?

Check your 2001, then 2004 bonus statements to see how much of a mortgage promise you have allocated to you. Then get a current value as NU plans have just jumped up in value due to January bonus announcement.

Remember that the projections you get from NU do not include or project from a figure that includes the current terminal bonus that is currently in place. This usually understates the real value of the plan. The mortgage promise value isnt included in the projections either.

NU no longer grade endowments amber. Its red or green only from this year. Even if the projection was showing a £2.50 shortfall, that would be red under their new process.

FarForest

Many thanks to dunstonh for your reply.

Check your 2001, then 2004 bonus statements to see how much of a mortgage promise you have allocated to you.

Checked and it shows a "maximum" of £453. Maximums are like sales where they show UPTO 50% off - you know that there is very little chance of you ending up with the higher number!

NU no longer grade endowments amber. Its red or green only from this year. Even if the projection was showing a £2.50 shortfall, that would be red under their new process.

No colour coding on our letters, but on the back page it says there is a high risk that the full amount will not be paid off, the illustrations vary from £2800 down to £690.

I will ask NU for a full forecast for the end of July 2008 when the mortgage term finishes.

dunstonh

Checked and it shows a "maximum" of £453. Maximums are like sales where they show UPTO 50% off - you know that there is very little chance of you ending up with the higher number!

Maximum is used because they will not pay that £453 if you are in surplus. If you were £200 short, they would only pay £200. If you were £500 short, they would only pay £453. So, in your case, you add £453 to the projection.

No colour coding on our letters, but on the back page it says there is a high risk that the full amount will not be paid off, the illustrations vary from £2800 down to £690.

Thats not much of a shortfall and those projections do not include final bonus and the £453. You may still end up with full amount. You should check information now as NU bonus rates were increased last week.

FarForest

Thanks again for your reply, I will contact NU for their projections.