Are Scottish Life the worst?

B164D

I've a 20 year Profitbuilder House Purchase Plan. When it matures next year I can expect £15000 despite paying premiums of over £16000 and having a target amount of £29000.
Is this the worst performing endowment of all or can anyone beat it?

Have just looked up the Scottish Life director's remunerations and it's left an unpleasant taste in my mouth...

dunstonh

Have just looked up the Scottish Life director's remunerations and it's left an unpleasant taste in my mouth...

They are a successful company. The have the largest market share in pension drawdown for example. Their pension contracts are also one of the cheapest you can get.

The performance of investments in a given period is not their fault.

kingstreet

In an alternate "De Lorean" reality, endowments were allowed to reach their natural maturity levels, without outside interference from regulators such as PIA and FSA.

The products were invested in equities as was always envisaged.

"Compensation" wasn't met from the investment funds, leaving them to reflect the true returns, without false growth and charges assumptions.

Scottish Life would still be a thriving scottish mutual life office and not just a "brand" belonging to Royal London, as would Scottish Mutual, Scottish Provident, Standard Life et al.

We'd still have an alternative to the "repayment" mortgage, offering better value to those who will move home two or three times in the next thirty years.

I'm getting too old for this... :mad:

B164D

So forget the taste in my mouth and SLD's remunerations, if this endowment is the worst performing during this period they have no responsibility for that. OK, I'll go sink my £15000 in their pension fund.

kingstreet

It probably isn't the worst performing. That accolade probably goes to a proprietory office form the 80s, such as Royal, GRE or Sun Alliance.

Those of us who worked in the business in the 1980s knew the risks and explained them to the purchaser; although by the 90s and 2000s, these risks had all turned into "guarantees" and "buy an island in the Caribbean with the surplus after repaying my mortgage" according to the purchasers.

As investment returns fell, interest rates dropped so many people paid less for their mortgage. If you'd got back what was illustrated, you may have paid thousands more in mortgage interest.

Then the compensation culture started. Many endowments may have repaid their target sums if compensation claims, regulator "intervention" and knee-jerk reaction from the life offices hadn't seen the money invested, withdrawn from equities.

I am sorry for policyholders who stuck with their plans. They really had no chance, given the external pressure. I would love to see a real-life maturity value calculation without the effects of regulator and compensation intervention. Some plans did meet their targets even allowing for these "distractions" suggesting more may have done so, if left alone.

Life Office director remuneration in the last year or two is a smokescreen and nothing more...

I'd love to hear from a few repayment mortgage holders who still have a mortgage after a few house moves over 25 years, who still have a few years left who would have also repaid their mortgage if they hadn't had to maintain affordability by returning to 25 or 30 years every time they moved home. This was the major benefit of the "interest-only mortgage with repayment vehicle."