Endowment Help!!!!

babs

Hi,

This is my first post and I'm the sort of person who sticks my head in the sand, never changes banks or credit cards and really should sort my finances out!

Anyway, I have been getting letters about the possible shortfall with my endowment and when I was telling a friend she said that I may be able to claim compensation. So browsing the net I came across this site and would love some advice on what to do! So I will briefly outline the situation here.

1st Endowment was taken out June 1989 for 25yrs (matures in 2014), it was initially taken out as savings plan, but in September 1991 bought a house and on the advice of the man from the Pru took out a 2nd policy (due to mature in 2019) and linked this in with the first to cover the endowment on the house. I was told that this was the best way to do things at the time and it was more than enought to pay my morgage and should also give me a tidy lump sum in the end.

Come 1997 bought another house, carried this endowment over and took the rest out as a repayment morgage on the remaining balance. However, like many others, now keep getting letters to say that my policies isn't going to be enough to cover the shortfall.

Help! What can anything be done or do I just have to meet the extra money, Who is the best person to contact regard this if I can get help somewhere!

Any advice, no matter how small appreciated!

Babs

dunstonh

Unlikely to get anywhere with a complaint on the first endowment as the purpose was savings rather than mortgage. Unless, that was, if it was sold as a pre-mortgage endowment.

The second endowment may or may not have potential but the cost of a repayment mortgage at that point would have been more than an endowment mortgage so budget and affordability would be important.

At the end of the day, if you feel that you were not aware of the risk involved, then you could complain. You should also be aware that your monthly commitment has been lower on your current situation then it would have been on a repayment mortgage. So, you need to decide what was important to you when you took the mortgage out. If you had been given the choice of pay £20-£30pm more and go repayment mortgage or keep with the potential risk of the endowment mortgage, what would you have done?

Compensationitis

Complain ASAP, you had absoluteley no idea how risky this method of repayment was, I now admit I didn't and I was an IFA.. :eek:

If someone sold it as a savings plan they would need a flaming good audit trail.

dunstonh

June 1989 and endowments were still very common as savings plans. I think there needs to be clarification as to whether this is a pre-sale mortgage endowment or a savings endowment plan. Although similiar, the charging and life cover would be different.

AndyL_3

See thread posted on page 2 of this chat forum entitled 'Endowment Shortfalls - What can you do' posted by MDUK as it contains a link to a complaints letter.

Good luck!