Royal Scottish Assurance flexible mortgage endowment plan

shestheboo

Apologies for the daft questions! This is quite long...

I am considering surrendering an old RSA policy which was taken out in 1992 and has 2 and half years to run. The policy refers to units bought (?) and my latest statement provided a surrender value. I'm familiar with "with profits" policies but I wondered if these unitised policies attract final bonuses? If not, then I'd look into surrendering it as the difference, financially, if it continued to maturity (exc payments), is less than £1k. Can't find anything about these on the net.

Second question (sorry!). I never pursued a mis-selling claim with RSA. It now sounds daft when I think about it. I received a letter around 10 years ago saying that they would be increasing my premium at no cost (I pay 36.90 but they would credit 48.20). I questioned RSA on what this meant and I understood that this would compensate for the shortfall on the endowment. To cut a really long story short, I thought this was to compensate me for the mis-selling, however whilst researching the policies, I only now realise this is not the case and they are 2 separate things entirely. Have I been stupid???

dunstonh

I wondered if these unitised policies attract final bonuses?

Unless it is a unit linked with profits fund, then there will be no final bonus. They have a daily value.

Your main issue is any difference between the current value and the surrender value.

I never pursued a mis-selling claim with RSA.

Did RSA sell it? (I cant remember them having an active salesforce at that time)

To cut a really long story short, I thought this was to compensate me for the mis-selling, however whilst researching the policies, I only now realise this is not the case and they are 2 separate things entirely. Have I been stupid???

Most people did not complain about their endowments and of those that did, most did not succeed in their complaint. It was a high profile issue at the time but it was more of a significant minority than a majority. You havent said whether you feel you were mis-sold or not. So, its difficult to say whether you should have complained or not. However, you are likely to be timebarred now (over 3/4 of endowments are). Although it is possible you could be in the quarter that is not. Time bar can be applied 3 years after your first notification of a high risk of a shortfall. That is where the middle example projection is less than the target figure.

kingstreet

Royal Scottish was a joint venture between RBS and Scot Eq and at that time, products were distributed by RBS staff in RBS branches or Royal Scottish consultants based in RBS branches.

dunstonh

LOL - When I was reading the post, i was thinking of RSA as Royal & Sun Alliance (which is frequently abbreviated to RSA). I know the thread title mentions Royal Scottish Assurance but I missed that whilst reading the post content!

shestheboo

dunstonh wrote: »

Unless it is a unit linked with profits fund, then there will be no final bonus. They have a daily value.

Your main issue is any difference between the current value and the surrender value

Did RSA sell it? (I cant remember them having an active salesforce at that time)

Most people did not complain about their endowments and of those that did, most did not succeed in their complaint. It was a high profile issue at the time but it was more of a significant minority than a majority. You havent said whether you feel you were mis-sold or not. So, its difficult to say whether you should have complained or not. However, you are likely to be timebarred now (over 3/4 of endowments are). Although it is possible you could be in the quarter that is not. Time bar can be applied 3 years after your first notification of a high risk of a shortfall. That is where the middle example projection is less than the target figure.

I've spoke to Aviva today (who took over Royal Scottish Assurance) and they confirmed that I can surrender the policy with no penalties and the value I would receive is the unit price x unit value. The policy is valued at half the original amount with 2 years to go.

In regard to the mis-selling, like most people, I was told that if you can afford an endowment mortgage then this is the better option, as I could expect a lump sum at the end of it. I was sold the policy by RBS.

Royal Scottish Assurance had/has inflated my payment by some 30%, this happened around 2001/2. Discussions with them at the time led me to believe that they were compensating me at no cost to myself for the poor performance. I thought wonderful - I don't have to make a misselling claim: they're a responsible company and compensating my losses. (I was naive back then!)

Do I have a case, if I was given wrong information at the time. The information I was given from RSA, in hindsight, was possibly incorrect. I can't post a link but I'm referring to RSA being fined 50m for incorrectly calculating endowment premiums in 2000.

dunstonh

In regard to the mis-selling, like most people, I was told that if you can afford an endowment mortgage then this is the better option, as I could expect a lump sum at the end of it. I was sold the policy by RBS.

One of the more common reasons for taking out an endowment policy was the lower monthly cost. When you bought yours, no endowment had ever failed to hit target. The media were pro-endowment and even certain consumer groups had best buy endowments. There is a lot of hindsight to see the issues but at the time, I doubt anyone really saw a decade of near continuous growth followed by a once in a generation size crash afterwards and not just one but a second one less than a decade later. Effectively the perfect storm for failure.

Anyway, the word "could" doesnt make it mis-sold. if it said "would" then it is.

Do I have a case, if I was given wrong information at the time. The information I was given from RSA, in hindsight, was possibly incorrect. I can't post a link but I'm referring to RSA being fined 50m for incorrectly calculating endowment premiums in 2000.

So, your correction was related to that I assume. Problem is that they would have written to you with the reasons for the adjustments. This was around 2001/2. The endowment mis-selling issue hadnt barely started at that point.

At the end of the day, you can ask them if you are timebarred from complaint. if you are then its game over. if you are not,then you can consider making a complaint. Although you will need something better than "could expect a lump sum". That wording is not a mis-sale.