Mis-sold endowment mortgage

mark61120

Hi,

In 1982, my wife and I took out a 15 year term endowment mortgage that the guy at Lloyds Bank enthused about. It was only for £25,000, but he insisted that we would probably get a return of about £32,000.

Within about 7 years, I paid off the mortgage and 8 years after that policy paid out a grand total of £22,500. We complained after seeing all of the furore regarding endowment policy mis-selling.
We completed the relevant forms and waited. After some time, we received a letter back stating that, because we had paid off the mortgage early (even though we kept the policy going), we had no claim. To me, paying the mortgage off was irrelevant as we still kept the policy, but they insisted that we were unable to pursue it further.

It still bugs me and I wonder if there is still recourse to get this looked at again.
Mark

dunstonh

In 1982, my wife and I took out a 15 year term endowment mortgage that the guy at Lloyds Bank enthused about. It was only for £25,000, but he insisted that we would probably get a return of about £32,000.

In 1982, the endowment would have been the long term regular saving plan of choice. So, all that makes sense. It would have had tax relief too on the premiums and you had greater MIRAS on the mortgage.

It still bugs me and I wonder if there is still recourse to get this looked at again.

No. The reason you were given was correct. Your complaint appears to have been upheld and the calculation for shortfall is not done at maturity but done at the point the mortgage is repaid. So, that would put it at 1990. With the extra MIRAS and LAPR on the endowment it was very unlikely that you were financially worse off at the point the mortgage was repaid. So, you were not in a loss position. Therefore no redress is payable.

It shouldnt bug you. You are still better off even though you fell short by £2500. The MIRAS and LAPR meant that the endowment option was probably around £30pm cheaper than the repayment option. It was one of the most common reasons people took out endowment mortgages. So, although it fell short, you would have saved money. This is why you didnt get any redress at the time.

mark61120

What an excellent concise answer. Thank you for taking the time to go into detail as I now understand what happened and why. The bank originally just said 'No'.

Mark