Pru/Scottish Amicable Endowment Top???

Froggitt

http://www.thisismoney.co.uk/money/pensions/article-2128109/Co-op-Investments-cuts-payouts-endowment-policies-mature-start-month.html

a man saving £50 a month for 25 years who was approaching his 30th birthday when he took out the policy.

The top payout on a similar policy so far this year comes from Scottish Amicable at £35,523,

How can this be true when there are holders of endowments from other insurance companies (on this board) showing surpluses, whereas my ScotAm paid out in February was a few grand in the red.

Thrugelmir

Aren't they merely stating the payout? Not the original projected value.

Froggitt

But the original projected values would have been identical wouldnt they? eg assuming 9% or whatever the fantasy football numbers were in those days

Thrugelmir

Froggitt wrote: »

But the original projected values would have been identical wouldnt they? eg assuming 9% or whatever the fantasy football numbers were in those days

Not necessarily. As the basic sum assured would have differed.

highet

hope this is true - ive got a 25 year home purchaser endowment from SA/Pru due to mature july - been paying £39/month since age 25 and have been expecting considerably less than projected £30000 payout so hopefully may get pleasant surprise!!!!

Froggitt

Does build your hopes up. I had one of these mature last month with a £3K shortfall and am expecting another shortfall on the one maturing in the summer.

magpiecottage

The rules about illustrations have changed over the years.

The projected returns on the underlying investments are now considerably lower, reflecting different economic conditions, and, since 1995, reflect insurers' own charges.

Between 29 April 1988 and 31 December 1994 LAUTRO, the insurers' regulator in that period, issued standard charges. Insurers could use their own charges if those charges were higher but never did.

However for the purposes of this thread that is academic. A 25 year policy maturing in 2012 will have started in 1987 - before the legislation came into force.

At that time policies were set up so that the guaranteed basic sum plus 80% of the annual bonuses would be sufficient to repay the loan, provided the annual bonuses continued at the same level. If that had happened you would have had 20% of the annual bonuses (not the same as 20% of the mortgage amount) plus any terminal bonus.

Of course it didn't work out that way.

highet

well-maturity letter arrived today-£2600 shortfall on £30000 projected so suppose not too bad but if thats one of the best payers glad i didnt go for one of the worst!!!!

Froggitt

Yup my second endowment was a good few grand short. See the thread on Scottish Amicable Prudential Payment of Further Bonus - Ive got two complaints in with the Financial Ombudsman as theyve not paid out the further bonus as they said they would in the transfer document.

kingstreet

It's worth remembering the plans being reviewed in these performance figures weren't mortgage plans. There was no target figure and all the £50 premium went into providing the guaranteed sum assured.

A mortgage plan would have a lower investment sum assured, linked to a decreasing term assurance to ensure there would be sufficient paid in the event of death.

cjph

Am not sure if this forum is live any more but my Scottish Amicable policy matures next March after 25 years. The projected £56K endowment is now expected to be £8K short at £48K, leaving me unimpressed to say the least. And the nice lady on the phone tells me it includes 'all' bonuses due, including the 1997 further bonus.

As the policy was sold to me before April 1988 neither the ombudsman or FSCS will offer any help or advise, and ScotAm/Prudential will not entertain any liability as it was sold by the finance arm of an estate agent which long since ceased trading, so not covered by any of the compensation schemes.

I am totally disillusioned with the whole finance industry, since I don't understand how a company can sell such a woeful product then wash its hands of it because it was sold through a third party. If a car fell apart, the manufacturer would not be allowed to brush off customers because they did not purchase it from them directly. I have a quote from Scottish Amicable with a projected surplus of almost £9K (not guaranteed, of course), but am now looking at a shortfall of £8K, so a miss of £17K; nearly a third of the original value. I don't think any of us would be in our jobs long if we worked on such results.

The big joke is that the finance industry has shown itself completely incapable of managing investments, so governments 'punish' them with more money. And to top it all, when they tell you your investment is failing (due to market conditions of their own making), they advise taking out FURTHER investment cover the shortfall they've caused.

Unfortunately, this current situation means that, although most of the mortgage will end next year, costs will actually increase to cover the shortfall, and so we are looking at selling our house and downsizing, with an opportunity to pay off the remaining mortgage and finally be free. If only I did not need a bank account or card for so many things these days.

cj