Chargeable event.

54and_counting

Took out a with-profits endowment policy in 1986, originally for 25 yrs. However, interest rates massively increased in the early 90's. I was advised to extend my policy to 30yrs as at the time I could not afford the vastly higher interest payments. Through working overtime over the years, I was able to pay off the mortgage about 10 years ago. I still kept paying the endowment policy premiums and in December last year the policy matured and it paid out. Now , however I have had a chargeable event letter saying that £12,000 is taxable at basic rate which has been paid by the insurance company but if I fall into the higher tax bracket then further tax is due. As this would push me over into the 40% tax bracket it seems that I would have to pay about £2,400 in extra tax. Originally the policy was with CIS and was a qualifying policy. CIS has merged with Royal London who have sent the Chargeable event letter.
As far as I can understand, if the policy agreement had changed in any way over the life of the policy, then I should have been informed that it could have become a non-qualifying policy. THAT NEVER OCCURED. I never received any amended policy documents, only the original ones. Does anyone think I should contact CIS about this?

AnotherJoe

Yes I think you should challenge it.

54and_counting

Thanks Joe,


If told earlier I may have sought to look into ways of sorting this out before this was sprung on me.