Endowment policy help

investme

Hi folks,

Might have to bare with me on this one. I am trying to look into this on behalf of my parents who aren't particularly financially savvy so it may take me a while to paint a clear picture of the situation. I am trying to establish if it is possible and worthwhile to pursue compensation for a miss-sold endowment policy

Their mortgage was with Nationwide and endowment with Standard Life.

The mortgage is paid off (and has been for a while, i will check how long)

In short, there endowment had a roughly £10k shortfall. As it happened, they chose to make over payments of roughly this amount (presumably with the goal of having a small windfall back from the endowment at the end) so the mortgage was paid off. But had it not been for them choosing to overpay, the endowment would not have been sufficient. They were sold the policy under the premise it would cover the mortgage.

Is this enough, in principle, to try and pursue? My mum is going to dig out the mortgage paperwork and anything she has about the endowment and I said I would look into the rest.

I don't know how difficult it is to prove an endowment was miss sold.

Thanks

dunstonh

I am trying to establish if it is possible and worthwhile to pursue compensation for a miss-sold endowment policy

Bit late to the party on that one. Most endowments were timebarred from a complaint by 2009.

The mortgage is paid off (and has been for a while, i will check how long)

This is important as even if the complaint is considered, it is only up to the point the mortgage was in force.

Their mortgage was with Nationwide and endowment with Standard Life.

Standard Life are one of the companies that do operate the timebar.

In short, there endowment had a roughly £10k shortfall. As it happened, they chose to make over payments of roughly this amount (presumably with the goal of having a small windfall back from the endowment at the end) so the mortgage was paid off. But had it not been for them choosing to overpay, the endowment would not have been sufficient. They were sold the policy under the premise it would cover the mortgage.

What evidence do that have to support their allegation? After all, the documentation issued at point of sale wont say that. It will say it has an objective to repay the mortgage but not guaranteed to do so. It could fall short. So, what do they have that says otherwise?

You also say "had a roughly £10k shortfall". This suggests the policy is no longer in force. How long ago did it mature? (there is a second time bar in place that you have to raise the complaint within 3 years of reasonably being aware of an issue".

I don't know how difficult it is to prove an endowment was miss sold.

Only around 1 in 4 complaints succeeded and that was back in the days before most of them were timebarred from a complaint.

There are a number of potential blockers here
1 - it has already matured and maybe over three years ago
2 - it was with a company that operated the timebar and would likely have been barred a decade ago.
3 - it was no longer directly linked to the mortgage due to overpayments on shortfall and that allows a three year trigger on another timebar.
4 - May have been sold prior to April 1988 (you dont mention dates but Nationwide and Standard Life suggests it could be pre-regulation. Or it could be a different distribution source. The consumers association recommended Std Life for example and buying direct. If that happened, there is no-one to complain to)
5 - Almost certainly, the allegations cannot be supported.

AnotherJoe

investme wrote: »

Hi folks,

Might have to bare with me on this one.

ooo err missus. :eek:

AnotherJoe

dunstonh wrote: »

There are a number of potential blockers here
1 - it has already matured and maybe over three years ago
2 - it was with a company that operated the timebar and would likely have been barred a decade ago.
3 - it was no longer directly linked to the mortgage due to overpayments on shortfall and that allows a three year trigger on another timebar.
4 - May have been sold prior to April 1988 (you dont mention dates but Nationwide and Standard Life suggests it could be pre-regulation. Or it could be a different distribution source. The consumers association recommended Std Life for example and buying direct. If that happened, there is no-one to complain to)
5 - Almost certainly, the allegations cannot be supported.

6. If you look at the cost of repayment vs IO + endowment, the latter would have been less money per month. So in what way did they lose out? It would appear they used the discrepancy to overpay the mortgage, turning it into a repayment.


7. For many people, a mortgage wasn't even affordable unless it was a low cost endowment. So, if they were in that camp, as well as being able to afford it they've gained from house price appreciation (compared to being in rental). If the amount of house price appreciation is > £10k, (pretty much a slam dunk) would they be happy to pay the excess back?




I make those two points just to point out that if they are feeling hard done by, or you think they were, almost certainly they werent and were better off.

investme

Thanks for the responses and clarification. I suspect we are too late and have little proof. Plus, as you say (and I now understand) they may have been better off as a result anyway.

I will look at the paperwork and timing and see, but i suspect it's a no go

MysteryMe

They may have got shares in Standard Life as well.

I did as I had a SL endowment with my mortgage and the share value has gone up