Endowment Mis-sell Success but..............

financialtwit

Have finally decided to take control of my financial life and am new to all this so be patient!!

I followed all the advice with regard to making a claim for the mis-selling of my 1987 Endowment with Legal and General and was successful: they have offered me (drum roll) £126!!!

I am more than a bit disappointed and have been told that the amount offered is in full and final settlement of my claim and also, I only have a couple of days to accept it or it will lapse. I think it must be so low as the policy will continue but as for the rest of the stuff they sent me - I am lost. They are even trying to convince me that they are doing me a favour by not taking into account some £2000 that they say I have "made" by having the interest only option for the last 20 years.

Should I get someone to go through their figures? and if so, who? Should I take the money and close off any possiblity of further action in the future Can it really be possible that the compensation is so low!! Any suggestions?

dunstonh

Can it really be possible that the compensation is so low!!

Yes. Many are getting nothing now as the better endowments are getting back on track.

L&G are not a bad provider and chances are that you are actually much better off with endowment as they use the surrender value and not the current value in their calulcations. If the surrender penalty is more than £126 then you in the money,.

I am lost. They are even trying to convince me that they are doing me a favour by not taking into account some £2000 that they say I have "made" by having the interest only option for the last 20 years.

Very generous of them.

So, you have had an endowment mortgage with lower repayments than a repayment mortgage and its doing well enough to be on track. Seems like £126 is a result worth having.

financialtwit

So I can set aside my fantasies of a cheque with several 000s coming my way then!

Don't understand the bit about it being on track though - it isn't and hasn't been for a long time. I converted half my original mortgage debt to repayment a few years ago in an effort not to be completely at a loss come maturity of the policy. It will cover the reduced amount.

dunstonh

Don't understand the bit about it being on track though - it isn't and hasn't been for a long time.

Projections are unreliable on with profits plans. They dont include any terminal bonus accrued to date. Plus some projection rates used understate the likely return.

i.e. plan was set up to hit target if it grew at 6% a year. However, projections at 4% show it running short. Logically, even if the plan is achieving that 6%, a projection at 4% would show a shortfall.

A lot of good endowments have been surrendered/sold on the basis of misunderstanding projections. Equally, some real duffers exist because projections overstate the real figure. This applies to pensions as much as endowments (i.e. Pearl project growth at 6% p.a. but havent paid a bonus in 6 years).