Endowment papers lost and questions

Grouchy

Hello,
I am asking for a friend who I was talking to a few days ago and this was just mentioned. The person who this has happened to is not bothered to do anything, so just out of interest I thought I would ask for some opinions/advice with what I understand to be the situation, I may have some of the terms incorrect, sorry. I thought perhaps he had been fobbed off and in the current changed climate he miight have more clout?

He bought a flat approx 28 years ago at £60,000 with a 30 year endowment. He was able to pay off the mortgage within 10 years but has kept up the endowment payments for a nest egg when older. About 10 or so years ago he noticed (he is slack about money) that his final amount was drastically lower and seemed to be consstantly decreasing than what he was advised it would be (he was advised when he took it out, best case scenario 140k, medium case scenario 100k worst case 70k, I think this was buy the broker.

He got in touch with Legal and General about 10+ years ago asking for a copy of the endowment paperwork (which he had lost, I'm not sure how) and they said since it was handled by a broker the broker would have the paperwork. He could not remember the broker apart from first name, nor the company name. Sounds far fetched I know. But this chap is a genuine sort. L&G said they did not have the paperwork and so it was a dead end. I am assuming that the predicted final amounts would have been predicted by the broker? And possibly only verbally - my friend cannot exactly remember if there was any correspondence with these figures mentioned.

So he gave up. The final amount that is predicted by L&G for him to get on maturity has decreased to £18k which is due within the next couple of years.

Obviously this doesn't affect his ability to pay off his mortgage (the flat has since been sold about 8 years ago) but I was quite surprised that L&G had told him 'tough luck'.

I'm not sure what questions to ask. But I suppose, does he have any sort of redress? Is it true that L&G would not hold any paperwork with the agreed terms? Is there some way of pursuing this?

Thanks for reading long post, apologies if I have got the terminology mucked up but I know little about endowments.

Any help appreciated.
G

dzug1

Grouchy wrote: »

(he was advised when he took it out, best case scenario 140k, medium case scenario 100k worst case 70k, I think this was buy the broker.

. I am assuming that the predicted final amounts would have been predicted by the broker? And possibly only verbally - my friend cannot exactly remember if there was any correspondence with these figures mentioned.

I don't know if it was the case when this policy was taken out - but it certainly later it became the case that predictions were regulated and had to be in the form specified

I would suspect he's past the deadline for claiming compensation, if he were ever entitled to it - but ICBW

Still worth plenty of investigation and of input more expert than mine.

Grouchy

Thanks for that input. I thought it would be tricky and a bit of a lost cause to be honest.
I don't want to appear dim, but the investigation you speak of, I'm happy to do a bit of that (though don't hold out any hope) but where should I start? L&G or legislation or ?

Thanks again
G

holly_hobby

Your friends policy was purchased a few yrs prior to the introduction of the Financial Servcies Act (referred to as A Day) - which regulated advice - and means that prior to this the adviser was not required to establish suitability of the product.

Secondly, even if pre A day and the broker was still in practice and elected to investigate the pre A day sale, in respect to a mortgage endowment complaint, any compensation, is only based over the period the policy was used as a mge repayment vehicle - so would cease circa 1995 - as it was at this point he repaid his mge, and subsequently elected to retain the policy as a savings vehicle.

You can't be compensated for loss of expectation, poor performance, but to be honest I would be v surprised if a 1985 low cost endowment didn't at least meet target ...

Hope this helps

Holly

dunstonh

I'm not sure what questions to ask. But I suppose, does he have any sort of redress?

Bottom line - no.

He bought prior to regulation of financial services. Plus if you look at the requirements for endowment complaints, you have three years from first being notified of a high risk of a shortfall to make a complaint. That would have started over 10 years ago. However, he also stopped using it for the mortgage so even if he could complain and even if he wasnt timebarred and assuming his complaint was upheld (statistically, most endowment complaints failed), they would use the calculation point in the 90s when he ceased using it for the mortgage. Endowments didnt start to fall short until 2000. So, at the point of no longer using it for the mortgage, he would not have been in a loss position.

It should also be noted that they do not issue predictions. They issue example projections. Statistically, the odds of the projected values being hit are tiny. More likely to win the lottery. Projections can at different times overstate the likely outcome and understate.

Wilkins

Grouchy wrote: »

So he gave up. The final amount that is predicted by L&G for him to get on maturity has decreased to £18k which is due within the next couple of years.

In order to claim the amount due, he will need to ensure that the endowment policy status is "unassigned", i.e., that L&G have been informed that the mortgage company have no claim on it.

Grouchy

Thanks for that additonal info, I think that clarifies things somewhat.