Endowment and FSO complaint

MrCee

I took out an endowment in 1994 and it matures next April.. When I took it out I asked my financial advisor for a quote for an endowment and a repayment mortgage quote.. The endowment appeared to be better value so I signed up for it.. It's with standard life and is £84 per month... As soon as I signed for it the financial advisor said that it didn't cover my mortgage amount so we took out 2 additional policies 1 in my wife's name and 1 in my name for an additional £10 per month.. This is also with standard life.. The policy numbers are exactly the same except the additional policy has the same reference number with -H at the end. These policies don't appear on my statements, it's just the original £84 per month.. I have 3 questions.. Firstly where does this extra money go, and why doesn't it show on my annual statements? Secondly am I covered for the predicted shortfall.. And thirdly.. I contacted FSO about this a few years ago, they reply that I got from FSO was cut and pasted in someone else's name, can I complain about the way my complaint was handled... Thanks Andy

Thrugelmir

What have Standard Life said?

MrCee

I've not spoken to them yet.. What is the best way to contact them... I've tried to register on their website but with no luck.. Think I will ring them tomorrow.

dunstonh

When I took it out I asked my financial advisor for a quote for an endowment and a repayment mortgage quote.. The endowment appeared to be better value so I signed up for it..

it was normal by 1994 to receive a cost comparison between endowment and repayment basis. And in most cases, the endowment mortgages were the cheaper option. It was a common reason why people selected them.

These policies don't appear on my statements, it's just the original £84 per month.. I have 3 questions.. Firstly where does this extra money go, and why doesn't it show on my annual statements?

Are they term assurance policies (with no value)? Are you referring to your Std Life statements or your bank statements?

Secondly am I covered for the predicted shortfall..

its not a prediction. it is a projection. No you are not. However, most Std Life plans have a mortgage endowment promise value that goes some of the way.

And thirdly.. I contacted FSO about this a few years ago, they reply that I got from FSO was cut and pasted in someone else's name, can I complain about the way my complaint was handled... Thanks Andy

Have you not got better things to do with your time?
It would have been sensible to raise it with the FOS at the time. Going back years later just seems pointless. It wont achieve anything.

MrCee

Well.. That's my query.. The endowment that I signed for was the cheaper, then it turned out that it was cheaper because it was insufficient.. So the extra £10 per month is just for life cover?. If I had been paying £94 a month into my endowment I probably wouldn't have so much of a shortfall when it matures!! So my financial advisor messed up.. He got his commission and I've ended up out of pocket by quite a lot ... I think I should be entitled to compensation for that?.

dunstonh

The endowment that I signed for was the cheaper, then it turned out that it was cheaper because it was insufficient..

unforeseen economic events were why it fell into a shortfall. However, those same events have made everyone better off (lower interest rates, the property price boom etc).

I think I should be entitled to compensation for that?.

Standard Life use the timebar. We have a few endowments on our agency with them and they send out a periodic report and every one of the was timebarred from a complaint a decade ago. You are very late to the endowment complaint party.

You get three years from first being notified of a high risk of a shortfall. Most of those started around 2001-2004. The notification was in the statements. If the mid rate projection figure was in shortfall, that was enough to start the timebar clock ticking.

Nothing you have said actually suggests any wrongdoing either. Sure, we dont have access to the files and only have a snippet of info to go on. However, one of the key documents looked for in a complaint is that a comparison with repayment basis was done and you confirmed that it existed.

How much is your shortfall looking at? If you were £20pm better off then that equates to £6000 in lower costs compared to repayment basis. A shortfall of less than £6000 actually sees you in pocket. Plus, dont forget the Std Life shares you got out of it.

Do you know what your MEP value is? Std Life often dont volunteer it easily. Many people have forgotten about it but that is usually worth several thousand too. It turns up on maturity but Std Life can tell you the range it is currently in.

MrCee

My shortfall is about £20,000 the original ammount was for £56,000 and the projection is that it will return me around £36,000, I will contact them later today and ask what my MEP is likely to be.. If I wasn't mis sold the endowment, maybe I was mis sold the other 2 policies as I wonder why I was made to take them out when my policy says in the event of death it pays out the full £56,000?

I know it seems a bit late to look into it now, but I've been engrossed in a career and raising a family..

Also do you know if I can withdraw my lgps in a lump sum, rather than drawing a pension, I'm 55 in April and been paying into it for 26 years.

AnotherJoe

MrCee wrote: »

Well.. That's my query.. The endowment that I signed for was the cheaper, then it turned out that it was cheaper because it was insufficient.. So the extra £10 per month is just for life cover?. If I had been paying £94 a month into my endowment I probably wouldn't have so much of a shortfall when it matures!! So my financial advisor messed up.. He got his commission and I've ended up out of pocket by quite a lot ... I think I should be entitled to compensation for that?.

How have you ended up out of pocket if you’ve been paying less ? You’ve had nearly 25 years to rectify the shortfall using that difference between endowment and repayment costs and would have been receiving red letters starting from about 15 years ago telling you needed to take action, what action did you take ?

Edit: You may be able to withdraw LGPS as a lump sum but it’s a lousy conversion rate of 1:12 and if you did you'd take a massive tax hit. You’d be better off taking a smaller repayment mortgage and using that pension to repay it.

MrCee

I paid £6000 to buy myself out of the original West Bromwich mortgage and took out an offset mortgage. I'm out of pocket because I was made to take out 2 not with profits policies, so if I had pad this extra into my endowment I would have got the benefit of it being with profits..

AnotherJoe

So the question is not about an endowment at all but two non profit policies. I think you’ll have to determine what those policies are for and what they provide and why they don’t show on statements if you are paying £20 a month I’d expect something to be showing and that's what I’d focus on.


(Paying £6k to get out of the WB mortage is not related I’d have thought since again you knew the costs of that upfront and a repayment could have had the same sort of costs to redeem. Was it a long fix ?)

MrCee

not sure what you mean by a long fix.. Those policies are now with a company called Reassure.. They used to be virgin life, I have emailed them to ask exactly what they are.. Also found some paperwork from "Scottish amicable home purchaser mortgage" it's for a £1000 and started a year after my mortgage and runs for 24 years there's no policy number with it, so I guess that's what the financial advisor meant when he said the endowment was insufficient,