Endowment Mis-selling - Don't give up!

Poppy9

One of my endowment companies has upheld my complaint and made me an offer; £180

Offer based on policy taken out in 1996 to mature in 2011. Target £16k.

calculation based on
Capital repaid under equivalent repay mortgageless £7214
Surrender value of endowment £7443

diff £-229

Interest only mortgage (endowment premiums & interest) £17002
Equiv. repayment mortgage (capital + interest + dec term assurance cover) £16592

diff £410

compensation £180

Is this reasonable given that my mortgage should finish in 2011. If I surrender policy and pay off part of mortgage to take out a repayment mortgage for remainder for 5 years will cost me £150 per month (per BBC website). Endowment policy costs £55 per month

dunstonh

Is this reasonable given that my mortgage should finish in 2011. If I surrender policy and pay off part of mortgage to take out a repayment mortgage for remainder for 5 years will cost me £150 per month (per BBC website). Endowment policy costs £55 per month

You forget that the repayment mortgae is 150pm but the endowment mortage is made up with an endowment policy costing £55pm plus an interest only mortgage costing.... you dont say.

The small amount of compensation suggests that the endowment is close to being ontrack.

Poppy9

So should I keep endowment??

It did dawn on me while watching TV that if I cancelled endowment and took on repayment mortgage the cost would be about the same (endow on 16k about £80 per month plus £55 policy i.e. £135) this means I'm £20 out of pocket per month for 5 years about £1200

dunstonh

It did dawn on me while watching TV that if I cancelled endowment and took on repayment mortgage the cost would be about the same (endow on 16k about £80 per month plus £55 policy i.e. £135) this means I'm £20 out of pocket per month for 5 years about £1200

A lot of reasons why people took out endowments in the past was that the monthly payments were cheaper. So, you would expect some small difference.

So should I keep endowment??

Depends on the endowment and the funds invested in. If it has good potential, then fine. If not, you may find it getting worst. Give us some info on it.

Poppy9

dunstonh wrote:

A lot of reasons why people took out endowments in the past was that the monthly payments were cheaper. So, you would expect some small difference.

Funny enough I have a letter from mortgage advisor when we took out 1985 endowment comparing the cost of the endowment and repayment mortgage. Endowment mortgage cost £5 per month more but it said I would have a £17k surplus at the end of 25 years!! We told it was worth paying the extra for an endowment mortgage

Depends on the endowment and the funds invested in. If it has good potential, then fine. If not, you may find it getting worst. Give us some info on it.

I'll have to look it up again. Its with MGM assurance but not sure about funds!

Crawf

Hi

Having recently discovered Martins site and read through all 38 pages of this thread I feel a good bit more knowledgeable about the whole situation, so thanks to all who have posted their advice and details of their own circumstances.

I have just read through my friends documentation regards her endowment policy (still have to dig out my own). We are looking to see if she had been missold her policy as she has had a Red Alert Letter from Scottish Widows which states that she has until 31st July to complain regards the sale of the policy.

I have read the original letter which came direct from a Scottish widows company rep. In this it states " you also require a broadly based investment spread offering a high level of security" So this seems to show that her attitude to risk has been considered, but with this should they have still recommended an endowment as a repayment vehicle for her mortgage. As she was clearly adverse to a risky investment.

Thanks
Crawf

dunstonh

I have read the original letter which came direct from a Scottish widows company rep. In this it states " you also require a broadly based investment spread offering a high level of security" So this seems to show that her attitude to risk has been considered, but with this should they have still recommended an endowment as a repayment vehicle for her mortgage. As she was clearly adverse to a risky investment.

Endowment is just a product, It does have an element of risk to it so its certainly only suitable for those with a cautious risk or higher. However, its the investment funds that have the main risk. If they have then gone on to recommend a balanced managed fund or UK equity fund, then it would seem the risk of the fund is above the risk profile recorded. If they have put her in property, gilts, fixed interest or similar, then they are classed as cautious funds. These would match the risk profile.

Crawf

dunstonh wrote:

Endowment is just a product, It does have an element of risk to it so its certainly only suitable for those with a cautious risk or higher. However, its the investment funds that have the main risk. If they have then gone on to recommend a balanced managed fund or UK equity fund, then it would seem the risk of the fund is above the risk profile recorded. If they have put her in property, gilts, fixed interest or similar, then they are classed as cautious funds. These would match the risk profile.

Thanks Dunstonh for your timely response!


They recommended the scottish widows uk with profits fund which consists of a broad spread of equaties government stocks and property.

Thanks
Crawf

Hitman_2

Hi everyone I have been very slow on the uptake with the endowment situation so please be gentle with me if much of this has been covered in previous posts.
My situation is the following......
I have 4 endowments 3 with St L and 1 with Ab Nat life.
The St L ones were taken out in 1984 1986 1988
and 1995 (Ab Nat Life) at present they are all showing a shortfall on maturity.

At present I have not acted on any of them but see advert after advert on the tv and in magazines about claiming for being mis-sold so I know i need to do something and urgently.

Firstly, who should i contact about the shortfall in able to get the best for me and secondly if i take up one of the many companies offering this service is it going to cost me more in commision than anything i hope to recuperate.


I can provide more details if you need them to be able to help me.




PS Yes I am slow on the uptake

dunstonh

Firstly, who should i contact about the shortfall in able to get the best for me

Assuming the complaint is upheld, the amount you are paid will be the same regardless of whom you use. Its only how much they will take off you that matters. So, if you do it yourself, which shouldnt take too long, you pay no-one anything. Others can take a big chunk for doing hardly anything. If you really need someone to write a letter for you and take hundreds, if not thousands for doing it, make sure you pick the right one.