Brittania Building Society/Alba Life

kersleykirk

In March 1992 the manager of Brittania Building Society sold us an endowment policy to cover our mortgage. This we believe was mis-sold and therefore am going to write to Brittania accordingly.

This aside the policy was passed by Brittania,where bonuses had been added to the policy, to Alba Life (without our aggreement or consent) who have written to us informing us of a projected significant shortfall at the maturity of the policy and that no bonuses will be paid for the rest of the life of the policy and indeed has not been paid for the last 2 years, by them, nor will there be any terminal bonuses!!!!.

Their advice is to continue paying into the policy, at £42.23, but to take out an ISA or switch the amount of shortfall to a repayment mortgage.

Has anyone else had any dealings with these companies and if so what can I do about the situation I find myself in?

EdInvestor

Commiserations Kerselykerk

You have found yourself in a nasty zombie fund - arguably the next worst to Equitable Life.

It will probably be best to surrender, but first let's see some figures.

Can you tell us the

Guaranteed sum assured
Value of total bonuses
Surrender value
Maturity date


Re making a misselling claim you may like to check the Which website to see if you have grounds :

https://www.endowmentaction.co.uk

kersleykirk

Sorry its taken some time to get back to you but here goes

The guaranteed sum assured is £8482

Total Bonuses £2145.58

Surrender Value N/K - Will obtain

Maturity Date 6/2/2012

The later does not tie in with the end date of the mortgage which is Feb 2014!!!!! Again another blatant error by the sales agent.

In anticipation

kersleykirk

EdInvestor

Kk

Will have to wait for the S/V to do any useful calculations.

kersleykirk

Helpful Ed

I'll send off/ring for a surrender value today.Will contact on same thread when value recieved

Thanks kk

ReportInvestor

Commiserations indeed, kk. At least the fact of no bonuses will make it possible to do a reliable calculation on which to base your decision!

It was a very smart move by Britannia BS to sell off their Life Assurance business to Britannic Assurance - who have all legal liabilities for any possible misselling. The renaming of Britannia Life into Alba Life helped to erase the memory of the connection with the Building Society.

Fortunately Britannia sold Britannia Asset Management at the same time to sweeten the pill for Britannic - who got the worst of the deal in retrospect.

But Britannia BS has moral responsibility for selling its members down the river IMHO. It even had special terms to entice poorly paid UNISON and nursing union members into these truly awful policies to try to boost its own weak insurance fund.

Britannia BS goes on endlessly how "as a mutual" they put back Xmillion into the Staffordshire economy each year. I wonder how much Britannia Life / Alba Life is going to take out of the local economy over the years?

BTW, you are not alone in your criticisms of how this came about.

Mail link - Ned Cazalet blasts companies who wheel & deal in policies without the owners' consent

Investors' Association Link - Britannic Assurance is now merging with Resolution Life - The zombie fund consolidation company. This may not be a bad thing in general, but your Alba Life fund is probably too far gone to make any difference.

Guardian link - Zombie Funds - A is for Alba
A truly dire picture.

dbs

When I complained to Britannia BS about the selling of my endowment I got a very arrogant reply because they thought they could hide behind the 1986 FSA act and if I did not like their judgement they would not answer any more of my letters(only sent two!!) and was told to take my complaint to the FOS.

So I did and I won.

I have been a loyal customer for years at Britannia BS but the treatment I got from head office was nothing but contempt for my complaint.

EdInvestor

dbs wrote:

I got a very arrogant reply....and was told to take my complaint to the FOS.

So I did and I won.

Well done dbs. Nobody should put up with this kind of treatment. Apart from having to pay your redress, you'll be pleased to hear they will have been charged 500 quid for having the complaint adjudicated by the FOS as well.

Experience suggests financial services companies learn lessons best when they are hit in the pocket.:cool:

kersleykirk

Editor wrote:

Kk

Will have to wait for the S/V to do any useful calculations.

I have now got the surrender value to help your calculation its £5796.09

kersleykirk

Reporter

Thanks for the background info

I was one of the UNISON suckers caught in the trap, and cant believe how these big institutions can just play about with our money as they see fit.

I did not want my fund transferring and certainly not to some (relatively) small and unheard of company. My home is now under serious threat!!!! and there is very little I can do.

(Boy did I need to get that off my chest!!)

I would be glad of any help to get myself and my family out of this situation

Cheers kk

EdInvestor

Hi KK

There's not much in it.

If you surrendered it and put the S/V in a savings account and paid in the premiums for the remaining 7 years at a net return of 4%, you would get 11,694, about 1k more than the 10,627 you are guaranteed to get if you continue to pay to pay into the policy.

So the decision to surrender or not depends on two things

1)The endowment's life cover. Do you need to replace it? If so, will it be cheaper to keep what you already have? If you don't need to replace it, then better to surrender.

2) Can you get a better return than 4% by perhaps using the money to reduce the outstanding amount of the mortgage and then remortgaging the whole loan at the lowest interest rate you can find?


If making a misselling claim, I suggest you put that in train before you surrender the endowment, if that's what you decide to do.