Company making me increase my endowment premium

andyhamilton_2

I'm new to this forum but I really need some good advice.

In 1992 I took out an endowment policy with the Guardian Royal Exchange to repay £18000 when the mortgage matures in 2013. The policy was in joint names with my wife and the monthly amount was £39.48.

In 1997 I divorced my wife and as part of the court agreement I signed the deeds of the house over to my ex wife and I also agreed to continue to pay the endowment policy premium.

When the policy matures the lump sum will be applied to paying off the capital sum of the mortgage for my ex wifes house.

I have now received a letter from the Guardian telling me that due to a projected shortfall they will be increasing the premium to £116 per month.
They say that the only way I can stop the increase is if my ex wife signs a form to say she doesn't want this to happen.

Obviously my ex wife won't sign the form because it makes me pay for what is effectively her shortfall (as she is the sole owner of the house).
They will be taking the increased amount out of my joint account (with my current wife) via direct debit starting in July 2007.

Can the Guardian do this??
I have spoken to them on the phone but they just say "we need your ex-wifes signature"
Is there a way out of this?? Can somebody please help me....

Thanks
Andy

Stonk

As a last resort, you could always stop paying the premium by having your bank cancel the Direct Debit. Guardian cannot force you to give them money.

The policy would then just carry on growing (hopefully). Obviously you will still have a shortfall which you would need to cover, either through a different policy or some other means of saving.

Shambler

I can't see how they can force you, it's up to you how you cater for the shortfall of the policy.

Due to the projected shortfall can you not make a claim against them for mis-selling?

andyhamilton_2

Thanks Stonk.
The problem with just cancelling the direct debit (as my current wife understandably wants to) is that I will then be in breach of the court order made at the time of my divorce.
I have told the Guardian that I will pay £39.48 and no more but they would seem to have the power to increase the direct debit regardless.
I suppose my question is, "Can the Guardian force me to pay more money to them as a result of them getting it wrong?"
Thanks.

andyhamilton_2

Shambler
they are saying that because the policy was in joint names that the decision has to be joint as so my ex wife has a say in it.
What annoys me the most is that they are being aggressive in forcing a premium increase and not giving me the option.
I'm out of time for being mis-sold it in the first place. I didn't claim as I am simply paying what the court has told me to pay. I'd have thought that that would be down to my ex as it is in her interest and not mine.
Thanks.

silvercar

cancel the direct debit and start a standing order for the same amount. You can't be shown to be in breach of the court order as you are making the payments as agreed.

petermb_2

You say your endowment is with Guardian.
Who advised you to take out this policy?
I am interested to know if your lender actually gave the advice.

There may be a little angle here that could put some pressure back on Guardian.

come back to me in a pm.

andyhamilton_2

Thanks petermb
To be honest I can't remember but it is likely to have been the financial adviser attached to the building soceity.
Andy

EdInvestor

Is it in the t&cs of the policy that the premiums can be increased?

What exactly are the terms of the court order?

andyhamilton_2

I'm not sure what the t&cs are because most of the original paperwork is still in my ex wifes possession.
My court order stipulates that I pay the endowment premiums until maturity and that the policy will be applied to pay off the capital sum of the mortgage.
I had to sign the deeds of the house over into her sole name and she has to "use her best endeavours to release me from my covenants under the mortgage and in any event to indemnify me against all liability thereunder".

In the letter telling me of the increased premium they also say that my ex wife and I have a number of options if we don't want to increase the premium. The problem is that I don't want to increase it but my ex wife almost certainly does as the shortfall affects her alone.

If she doesn't sign the form to prevent the increased premium then she will have her shortfall paid for...by me!
Surely the Guardian should be recommending an increase and getting signatures to approve this course of action and not forcing the increase if both don't sign.

Thanks for your interest EdInvestor.

EdInvestor

andyhamilton wrote: »

In the letter telling me of the increased premium they also say that my ex wife and I have a number of options if we don't want to increase the premium. The problem is that I don't want to increase it but my ex wife almost certainly does as the shortfall affects her alone.

It looks like there's no technical way out.But since this is a long term commitment, it might be worth your while going to a mortgage broker and seeing if you can find a cheaper and faster way of getting rid of this commitment, (that is paying off the debt).

Obviously any proposal would have to be agreed by your ex wife, but it seems unlikely she would object to owning the house outright more quickly, and under the agreement she has to use her best endeavours.

You may be able to rejig the whole thing by surrendering the endowment, reducing the size of the loan and then doing a remortgage or overpaying on what's left.

At least there would be a reasonable chance of not having to increase your outgoings as currently suggested.