Scottish Amicable Endowment - Payment Of Further Bonus

Froggitt

Thanks to radiouser for the copy of the document. Here is the section in question......slightly mangled by optical character recognition.

(ii) Further bonuses
The balance of the estate of Scottish Amicable will be distributed as further bonuses on eligible policies when they are paid out. The total estate as at 31 December 1996 is estimated to be approximately £1,000 million, and, after deducting the estimated cost of the special bonus, the current value of the further bonuses is estimated to be some £530 million The estimate of the estate as at 31 December 1996 allows for the contribution to be paid into the Scottish Amicable Insurance Fund in accordance with the terms of the Scheme (as described in Part V) and includes an estimate of the present value of future profits from non-profit, unit-linked and unitised wilhproh'ts pension business retained in the Scottish Amicable Insurance Fund.

There is nothing in Part V of relevance.

So Man from the Pru, looks to me like you need to pay out "further bonuses" in addition to terminal bonus etc.

Froggitt

Originally Posted by bluefrew2

I made a complaint to the Financial Ombudsman Service after a rejection by the Pru over the matter of the "Further Bonus" and received a reply only a few days ago. Effectively the adjudicator rejected my complaint because "he could find nothing to say that the bonus was guaranteed but was dependant on a number of factors including future investment returns".

So, what is the value of the further bonus pool, having been invested since 1997......fifteen years or so? Gotta be over a £billion. Is the above adjuticator ruling saying "you have no further bonus because it got invested in Enron etc and is worthless"?

thebull

Hi all just posting a transfer value I requested from the prudential.I
have no intention of cashing the policy in but was curious as to its value.
The policy which is taken over 25 years still has 6years and 2 month to run at a cost of £28.80 per month.It is no longer required to pay off a mortgage and is purely been used as an investment fund now also the life assurance part of the plan is still in operation.

Cash in value--£8937.96
Claim value on death-- £18.900

Projected maturity values-£13,300 @4.00%
-£15,000 @6.00%
-£16,800 @8.00%

Any comments welcome .

sheslookinhot

thebull wrote: »

Hi all just posting a transfer value I requested from the prudential.I
have no intention of cashing the policy in but was curious as to its value.
The policy which is taken over 25 years still has 6years and 2 month to run at a cost of £28.80 per month.It is no longer required to pay off a mortgage and is purely been used as an investment fund now also the life assurance part of the plan is still in operation.

Cash in value--£8937.96
Claim value on death-- £18.900

Projected maturity values-£13,300 @4.00%
-£15,000 @6.00%
-£16,800 @8.00%

Any comments welcome .

I would not think that the projected maturity values include a terminal bonus. So possibly a larger payout. Have they been paying out TB's recently ?

2k still to invest for a possible £2.3k return. 100% in 6 years not many would beat that.


I am paying £61 per month with 3 1/2 years to go. Not had any recent figures, in fact maybe due something around now.

SteveStJulians

I replied to this thread a few months ago - I had two Scot Am policies which were maturing this year, one for 78k and one for 22k. In Jan this year (2011) I contacted The Pru and asked roughly what figures I could expect. After having been given a lot of flannel about financial problems etc. I was made to believe that my final repayments would be a lot less than I hoped for. This lead to much gnashing of teeth, email writing and contributions to this blog. The cheques arrived during the past thirty days and they totalled almost 97k between them. So much ado about nothing. How The Pru calculated their final figures in January I don't know and I would only like to say to the young lady who gave me the bad news that the reality was much more pleasant.

So there is hope for all you out there.

The good news for me is that the house was sold in 2007 so this money is a real bonus! :rotfl:

VFM4ever

Just wondered if there have been any further developments on this long running thread? have just had our policy mature and it is over 1000 short of the target after 25years. Have gone through all retained papers and confirmed that the special bonus promised at the time of the transfer to Pru was applied in 1997- although the 17/10/97 letter clearly states that it would be applied at maturity- confusing to say the least and have spent the last 14yrs expecting it to bridge any gap in performance v target.

However, the final element of the ScAm legacy is the "may be entitled to further bonuses" statement in the 17/10/97 letter, (and the original proposal?) In the 2002 ScAm board (chairman's) update, he stated that they were responsible for SAIF, that the remit included "safeguarding the interests of policyholders" and in his closing remarks Sandy Stewart said "we will continue to manage the ScAm funds having regard solely to the interests and reasonable expectations of the policyholders of the SAIF" "Ring fencing" was a term used in other updates.

If these excess funds have been managed as promised, then it should have been possible throughout to inform SAIF policyholders how much of the excess monies were worth at any one time- and indeed to be able to see if the funds were in fact for our sole benefit, there should have been a strategy to ensure that every pre 97 SAIF policy holder received some benefit from the funds available- with all of it used up as the final policies come to fruition?

If Pru cannot confirm the whereabouts of the fund now, then I suggest that should be their problem, and not ours. they should explain what has been doen with the excess funds/assets after 1997- Statements were clearly made at the time that all this money would benefit us solely. If they cannot prove that this has been done, it must be a reasonable assumption that the funds have in fact benefitted a wider audience, possibly other Pru policyholders or even shareholders of theirs?

Have read that FSC have rejected a number of complaints but I wonder if they have really understood what the complaint is? I would be up for helping to get a large (class) complaint together if there is sufficient interest. Having "a go" on our own suits large, powerful organisations very well!

Froggitt

(ii) Further bonuses
The balance of the estate of Scottish Amicable will be distributed as further bonuses on eligible policies when they are paid out. The total estate as at 31 December 1996 is estimated to be approximately £1,000 million, and, after deducting the estimated cost of the special bonus, the current value of the further bonuses is estimated to be some £530 million.

I think the question is, wheres the £530m, plus 14 years of investment.......I would have expected it to have doubled in size in that time.

bernithebiker

Only just found this thread.

We have a ScotAm (now Pru) House Purchaser endowment taken out in Nov 1993 to pay off our £72k mortgage on our first flat.

We pay £114 per month.

We went through the whole 'endowment won't cover your mortgage' thing in about 2003. I had complained about having been missold the endowment as we were young (23ish) and were pushed into it by a financial advisor, obviously on loads of commission.

Someone phoned me in 2003 and asked a few questions, including what my job was. As I was then trading oil, I soon got a letter to say that as I was in 'financials' I should have understood the risk so no compensation was due.

Basically I was scammed twice, as in 1993 I was not at all in 'financials'.

Latest estimate is that if 8% growth 63k, 6% 56k and 4% 49k, all of them obviously well below the 72k target.

I just ran a spreadsheet that shows that if we had put the £114 a month into a savings account at 5%, (realistic) compounded annually, we would have 64k at maturity (2018).

So basically, my money has been tied up for the best part of 20 years, inaccessible and they can't even beat a 4% savings account?

Where did the money go? How can Prudential (worth billions) stand back and watch over such appalling performance?

This for me is the financial industry in a nutshell. They are there to make money FROM you, not FOR you. It stinks. I will never go near any financial product, pension, fund, stocks, etc. ever again. The dice are totally loaded in their favour.

We have done well in the past in property, working hard to renovate houses. Despite the downside risks of property, it's something I know, that I can see and touch and that can always bring in revenue. This is where any spare money will go in future.

RJRock

A lot of talk about pursuing the lost £530million. Anything actively being done?

thebull

my policy is due to mature in 6 years time I would like to start writing to the PRU to ask about the ScotAm part of my fund .Anyone any advice on what sort of questions to ask .