Endowment Mis-selling - Don't give up!

dunstonh

dbs wrote:

Who knows if it was affordable if it was not offered in the first place.
Surely this option and the fact the endowment mortgage was going into retirement age should have been mentioned at the point of sale.

When I took out my endowment it cost more than the repayment but took this option because the advisor said it was the best option.

I think we are both posting based on our own experiences.

I always quoted both options. I generally found that people went for the cheapest not the one that carried higher/lower risk. Depending on interest rates, both options would have been cheaper at different times. I also tended to get involved after the term of the mortgage had been set so that wasnt a discussion I was ever involved with.

bill_3-2

We got a letter from the BS today with an offer. £1300

They said it is what the position would have been if we had taken out a repayment mortgage.

There are loads of tables and figures which mean nothing to me.

We can complain to the Chairman of the BS acccording to the General manager of the BS if we so wish who has the final say.

There is no mention of bonus payments and it still does not pay off the mortgage. If we had taken a repayment mortgage we would have been finished paying five years earlier than the 20 year endowment.

What would people suggest any comments welcome :beer:
Bill

dunstonh

There is no mention of bonus payments and it still does not pay off the mortgage. If we had taken a repayment mortgage we would have been finished paying five years earlier than the 20 year endowment.

No you wouldnt. The requirement is to put you in the same position you would have been if you were on a repayment mortgage. So, you take the compensation and the surrender value and pay that off the mortgage and switch to repayment mortgage.

dbs

You have the right to appeal against the calculation of redress then if not happy inform your BS you want the FOS to check the calculation but remember the FOS could actually reduce the payment as well as increase it if the calculation is found to be flawed.

Kantankrus_Mare

I've just been trawling through all the info on this thread and thought I'd add my own experiences.

I have two endowments both with the "lovely" stadndard life.

The first was taken out in Sep 88 for 17,000 with the Nationwide. Showing a HUGE shortfall of up to 7,000. We are in the process of complaining about this one with the Nationwide who have admitted we have a strong case of mis-selling and we await to see what they offer us next month. (Waiting with baited breath)

Now the other was sold to us from a Halifax Estate agent who said they would sort out all financial aspects when we we purchased a house in 1993 that they were selling.

This also was for 17,000 and we have a put a complaint in, much the same as the first as this also is showing a possible shortfall of 7-8000.

We have had a reply stating that "Halifax Building Society was an appointed representative of Standard Life".......so now they have referred our complaint back to Standard Life.

Anybody had any joy in this respect as I really dont hold out much hope though I shall be taking it all the way the bitter end if I dont get any satisfaction.

Even if I get some compensation I'm not sure what to do about my mortgage as I have 8 years remaining and I imagine I will be paying out a hell of lot more a month if i turn it to a repayment mortgage.

Will keep you posted on if and when receive compo.

EdInvestor

Hello Bill

....it still does not pay off the mortgage....


Let me try and clarify what is supposed to happen here, because it's obvious many people are very confused.

First, the compo is NOT supposed to cover the endowment shortfall.

What is supposed to happen is that after the compo is given to you, you follow this procedure:

1.You surrender the endowment
2.You pay this surrender lump sum AND the compo money to the mortgage company to reduce the total amount of the mortgage.
3.You increase your monthly mortgage payment by the amount you have been paying monthly for the endowment - so your total outgoings remain the same, but they all go to paying off the mortgage.

Once you have done this, the mortgage is guaranteed to be repaid at maturity.But only if you follow these three steps.

If you spend the compo money on something else, and don't surrender the endowment, or surrender it and don't pay the money into the mortgage, then you will still have a shortfall, and it could get bigger.

dunstonh

The first was taken out in Sep 88 for 17,000 with the Nationwide. Showing a HUGE shortfall of up to 7,000. We are in the process of complaining about this one with the Nationwide who have admitted we have a strong case of mis-selling and we await to see what they offer us next month. (Waiting with baited breath)

Is that a real value shortfall or an inaccurate projection shortfall? As its Standard Life, it will be the latter.

Even if I get some compensation I'm not sure what to do about my mortgage as I have 8 years remaining and I imagine I will be paying out a hell of lot more a month if i turn it to a repayment mortgage

Not really. If successful, the surrender value and any compensation would put you in the position you would have been on repayment mortgage (minus the amount for the endowment mortgage being cheaper if applicable).

Although I would verify the real value of the Standard Life endowments before you do anything and do not rely on the projection shortfalls. Remember maturing plans are getting shortfall warnings but are going on to provide surpluses.

EdInvestor

Standard Life WP endowment policyholders also need to bear in mind the planned demutualisation next year which should bring a windfall benefit.

EdInvestor

Sometimes you have to laugh about this product.

What's an endowment's real value?

Is it:

1.The surrender value the company will give you for it now?

2.The current value, as on your statement?

3.The guaranteed value at maturity, if you keep paying the premiums?

4.The value at maturity according to the regulator's projections?

5.The projected value at maturity plus an unspecified amount of terminal bonus which may or may not be there?

6.The amount of money an endowment trader will give you for it?

Some people might say that you couldn't make it up.;)

mazza245

I'm sorry about this but we appear to have a problem which I can't find on this thread. We had two endowments, both with Norwich Union The first one I chose as I worked at the Skipton Building Society then and all the customers were taking them out, as the staff were promising lump sums on top of paying the mortgage off, the usual stuff. I think as I worked there, we didn't pay commission, so we thought we had done alright on that. That matured five years ago and we didn't do as well on it as we thought we would but it did go towards paying the mortgage off along with my husband's retirement 'pot'. We didn't complain as it was very early in all this and it didn't do that badly in the end.

When we moved to our next house, we took out a top-up one, again with Norwich Union, but just requested it through our solicitor (who has now retired, the company has disappeared). Although we heard about the shortfalls, we kept it on thinking we might still get a nice little nestegg at the end of it. All the letters from the company have shown it to be ticking over nicely and we still hoped for some kind of final bonus which would make it worth while. Now it is due to mature this August and the last letter showed a huge drop - actually reduced from the figures in the previous notification! This was taken out in 1985 so we have assumed that we will be unable to complain but reading some of these messages makes me think we might be able to after all! Can anyone advise whether it is worth trying to complain. The fact that there is no-one to blame (solicitor retired, etc.) - does that matter? We were definitely enticed by all the talk of lump sums, nice little nestegg and all that but I don't think we have any kind of documents proving it. I know the message seems to be - don't give up, keep trying but we haven't registered any sort of complaint at all up to now, does that mean it's too late, we have missed the boat? Before I go through what looks like a long procedure, I thought I would just see if anyone has any advice for us. Thanks.