Endowment Policies

sampa_2

Hi

I have two Endowment Policies and they are both in Red Alert! Dont know if I should claim on them? If I claim and get money back what will happen to my endowment policies. Will I have to go on a repayment morgage, if I claim back. Hope someone can help me.

Thanks:)

kingstreet

When were you first notified of a potential shortfall?

The clock was ticking from that point and you may now find you are time-barred from making a complaint if you've left it too long.

If you can complain and are successful in doing so, you will be put into the position you would have been in had you taken a repayment mortgage from the outset. It will be your decision what happens to the policies and if you decide to switch to all or part repayment.

On what grounds would you base your complaint?

sampa_2

I am not sure, have to find the letters. I owe about £15,000 on my morgage. I am really worried that if I claim the repayment may be more than I am paying now.

McKneff

You have had quite a number of years to raise any complaint and as already said, it is very probably time barred now anyway.

When do they mature. and when does your mortgage end.

sampa_2

Sorry would base my complaint on the fact that it should have paid of my endowments and that I was sold It and did not know what the policy was about:)

McKneff

Well I really cant see them selling you a policy without explaining what is was about.

Apart from that, they would have given you paper work to read before you signed to agree to it.

sampa_2

One matures next year and the other in 5 years

Jimbo1976

There was a time limit of about 3 years for sending a complaint to the financial ombudsman service once you became aware that there would be a shortfall, this would normally have been when you received what's called a high risk warning letter, which for most people was a red letter.

Even if you didn't fully understand the original policy, this would have given you sufficient information to understand that something was wrong and given you the opportunity to complain.

FoS may consider complaints outside of this timescale in exceptional circumstances.

dunstonh

When you say claim on them is this because you are dead?

or you do you mean complain about them?

Sorry would base my complaint on the fact that it should have paid of my endowments and that I was sold It and did not know what the policy was about

Can you prove that? Are you saying you didnt know it was linked to a mortgage and that you were not supplied any documentation about it?

I am really worried that if I claim the repayment may be more than I am paying now.

It will be. Endowment mortgages were typically cheaper than repayment mortgages. It was one of the most common reasons people took the endowment mortgage despite the investment risk.

Endowment shortfalls have been known about for about 12 years. Someone choosing to address the shortfall potential around 10 years ago would typically see a cost of around £20pm. Ironically, not dissimilar to the typical monthly cost difference. The closer you leave it until maturity, the more expensive that would become.

The biggest issue in any complaint you make is that you are probably time barred from complaint. You have three years from first being notified of a high risk of shortfall (red alert). Most of these started around 2001-2004 and most endowments were timebarred by 2007/8. Some are still not but if yours is then any complaint can be refused as out of time.

McKneff

Did you only originally borrow £15K for your mortgage.
When does it end

Froggitt

You cant claim just because they are red/not going to repay the target amount.