Late Payment of Matured Endowment Query

ppeetteerr

I am advised by an insurance company that I will be paid out on an endowment policy which matured 17 years ago.

They also advised that they will pay for late payment, presumably the total endowment amount plus interest for the 17 years.

 

My query is :  1) At what interest rate should they pay the late payment

                      2) Should this be compound interest

 

Also they advise that they have to pay HMRC tax at the standard rate on the interest (which I can claim back)

Can you advise what is the standard rate.

 

Regards.

[Deleted User]

It'll be 8% simple interest pa.

Standard rate is 20%. Whether you can claim it back or need to pay more will depending on your cumulative earnings and tax paid. 

dunstonh

It'll be 8% simple interest pa.

It may not be as a late maturity is not necessarily wrongdoing by the insurer.   The 8% simple is the wrongdoing rate.    It may just be base rate plus x%.  

For example, if the OP didn't notify them of a change of address and they haven't been able to locate them until now then that doesn't qualify for the 8% simple rate.

ppeetteerr

Dunstonh: just to clarify, (sorry I'm not very good at finance) would it be correct that if the maturity value is say £1,500.00 then the late payment should be £1,500.00 x 8%  and then x 17 (for the late years)

Thrugelmir

Not neccessarily 8%.  What caused the late payment? 

Be £1500 times x% in year one.

Then that figure times x% in year two.

and so on (adjusted to account for shorter periods than a year). 

ppeetteerr

Thrugelmir:
The late payment was their fault as we had lived at the property for 6 years when took out the endowment and still lived there for 4 years after it matured, so no reason for them to not have contact info.

The payment you describe, is that whats called compound interest?