Endowment shortfall

rossclivejamesronald

Please could somebody give me some advice as i just don't know what to do. I.ve received a letter from Standard Life telling me that my my endowment plan has a high risk shortfall of potentially between K15 to K19 on a target amount of of just under K48. I.ve paid premiums on this policy for17 years and have not missed a payment, there are 3 years left, They are asking me for more money which as far as i'm concerned is dead money. To me this is nothing more than corporate theft! Please is there someone out there who could advise me what i can do.
thanks.
clive.

dunstonh

To me this is nothing more than corporate theft!

How do you work that out?

Please is there someone out there who could advise me what i can do.

When it matures, you use the endowment towards the mortgage and pay any shortfall to the lender out of your personal savings.

holly_hobby

You need to start making plans on how you will address any shortfall at maturity (which may be less than 15k or in excess of 19k, which is depenndant on the level of future reversionary bonuses and the possible addition of a terminal bonus at maturity (if a WP policy).

You could apply to convert a sum equal to at least 19k to capital and interest repayment over the remaining term (and/or request a term extension to assist with repayment affordability), and/or simply start saving to prepare of the day.

Hope this helps

Holly

Aberdeenangarse

rossclivejamesronald wrote: »

To me this is nothing more than corporate theft! Please is there someone out there who could advise me what i can do.
thanks.
clive.

Should have gone to Specsavers.

tanith

We switched to a repayment mortgage as we realised our endowment was going to have a shortfall..

rossclivejamesronald

Hi everyone, thanks for the replies. But am I missing something here? When I first got married, I took out an endowment policy which paid off the mortgage and I had a couple of grand bonus spare. On this occasion, they are telling me that I am going to be between 15-19 thousand pounds short on the expected 48 grand. I know full well that any difference between the fruition of the endowment and the outstanding sum on the mortgage would have to be met by any personal savings. What I am getting at, is having paid 17 years of monthly payments to expect 48 thousand pounds endowment back in 3 years, why am I now being told that there's going to be a massive shortfall? As I said, this is nothing short of corporate theft. Can you see what I am getting at? Thanks. Clive.

Dick_here

This is a wind-up, presumably.

Thrugelmir

rossclivejamesronald wrote: »

Hi everyone, thanks for the replies. But am I missing something here? When I first got married, I took out an endowment policy which paid off the mortgage and I had a couple of grand bonus spare. On this occasion, they are telling me that I am going to be between 15-19 thousand pounds short on the expected 48 grand. I know full well that any difference between the fruition of the endowment and the outstanding sum on the mortgage would have to be met by any personal savings. What I am getting at, is having paid 17 years of monthly payments to expect 48 thousand pounds endowment back in 3 years, why am I now being told that there's going to be a massive shortfall? As I said, this is nothing short of corporate theft. Can you see what I am getting at? Thanks. Clive.

I am surprised to learn that a possibility of a shortfall has not been highlighted before. Particularly with only 3 years for the policy to run.

holly_hobby

Revised EMVs illustrating potential shortfalls to target, as a result of volatile equity markets, poor returns, reduced profits and a reduction to predicted allocated bonuses - commenced 10 yrs ago.

I get the feeling you believe there is some sort of grounds for complaint, and are unhappy that unlike your first low cost endowment policy, that matured with a surplus, this one has suffered the peformance issues of most LCEs effected from late 80s onwards.

It appears that you were already familiar with LCEs when you purchased your SL policy.

Unfortunately, one can't be compsentated for loss of expectation - so your efforts would be best placed in planning how you will meet any shortfall (which is still only a predicition, and may not actually occur, or be as great as currently assumed).

Hope this helps

Holly

rossclivejamesronald

Holly,
Thank you for spending time giving me excellent advice. I still don't think it right that huge institutions get away with it. If an ordinary person like myself did this then they would be jailed for fraud, and there was me stupidly believing that my house would eventually be paid for in 3 years.
clive.

holly_hobby

It would only be fraud as you say, if they gave you any guarantee that the policy would meet its target figure - and if you have such a guarantee then the provider must legally adhere to it.

Illustrations and estimated maturity values provided at the time of sale, are just that unfortunately - estimates as to how the policy will perform, unfortunately markets have not performed to expectations, hence the re-issue of emvs over the last decade or so.

I do feel for you and all who are to suffer a shortfall, but as I say it is impossible to compensate for a reduction in anticipated returns.

Hope this helps

Holly
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