Endowment Policy Maturing

thegingernuts

I have an Endowment Policy soon to be maturing with ROYAL LONDON.
They have confirmed to me that the policy at maturity will be valued at the bid price of the bid/offer spread on that day. They also wrote to me to confirm that this was clear in the documentation when the policy was taken out.
My issue is that for some of the funds (it is in mixed funds) the bid/offer spread is up to 5%.
That means every time the fund has invested over the last 25 years I have paid up to 2.5% above the mid price and on maturity the whole fund will be valued at 2.5% below the mid price.
This is on top of normal charges over the years of course.
Has anyone else had experience of this and made a complaint ? They have said that my only recourse is to the Ombudsman. I am considering it but would love any other members experiences if there are any.
Many thanks
Tim

[Deleted User]

Hi,

ok, so when you took it out you were aware of the spread?

Over the 25 years your monthly payment will have bought units, depending on price, number of units will differ.

What is the average price per unit it has cost you, and what is price now?

I would reckon over 25 years you've done very well.

dunstonh

They have confirmed to me that the policy at maturity will be valued at the bid price of the bid/offer spread on that day. They also wrote to me to confirm that this was clear in the documentation when the policy was taken out.

Which is of course how every single unit linked plan works.

My issue is that for some of the funds (it is in mixed funds) the bid/offer spread is up to 5%.

Which is charged at point of contribution. Not at maturity. Also, many endowments ceased charging it later in the term. Often through increased allocations.

That means every time the fund has invested over the last 25 years I have paid up to 2.5% above the mid price and on maturity the whole fund will be valued at 2.5% below the mid price.

Assuming no increased allocations, then there is no mid price.

has anyone else had experience of this and made a complaint ?

As they all work like that, a complaint would be pointless. It is doing what it is meant to do.

They have said that my only recourse is to the Ombudsman.

Which means you have already made a complaint and it has been rejected as you dont get access to the ombudsman until your complaint is rejected.

I am considering it but would love any other members experiences if there are any.

The ombudsman is not going to uphold this complaint as its working as intended. Your are effectively complaining that the endowment is doing exactly what it is meant to and what is documented to do.