Scottish Amicable Endowment - Payment Of Further Bonus

Froggitt

SteveStJulians wrote: »

I took out two Scottish Amicable with profits endowment policies in the '80s (one in 1986 and one some time later). They were due to pay out a total of 100k exactly and mature this year (in May and July).

I just contacted The Pru and they tell me that the current policy surrender values (including terminal bonuses) are 69,300 and 18,300 (roughly) so a shortfall of almost 12500!!

I have similar policies and projected shortfalls on red letters.

However these shortfalls were reduced somewhat by a few grand of mis-selling compo (no dependents, no stockmarket investments). Did you not investigate whether you were mis-sold?

Froggitt

Heres a bit more info about the missing money..........

http://www.thefreelibrary.com/AN+AMICABLE+pounds+1.6bn+BONUS%3B+Pru+takeover+bid.-a061096308

Windfall fever was fuelled by details of another pounds 1.6 billion handout yesterday.

More than a million customers of insurance giant Scottish Amicable are in line to collect an average pounds 1,450.

They will be in the money if the firm's takeover by Prudential goes ahead on September 30.

The firm will be writing to customers shortly spelling out what the complex package of benefits is worth. But everyone who qualifies will get a pounds 250 lump sum soon after the deal goes through.

A second cash payment will be linked to how much people have invested. The handouts - paid at the same time - will total pounds 600 million. Another pounds 470 million will be dished out as special bonuses increasing the value of savings policies.

Another pounds 530 million will be invested in the stock market. This will be used to boost final bonuses when policies pay out

SteveStJulians

Our house was sold in late 2007 so the endowments are not linked to anything - the Pru sent me letters telling me that there would be a shortfall nothing like 12.5% - even their worst estimates stated around 6% shortfall in total. Suddenly during the past year this seems to have changed - no doubt due to 'smoothing' which seems to be a general catch all statement allowing the Pru to reduce redemption values.

As with everyone, I was told by my adviser who sold me my initial policy that a with profits policy would guarantee returns of at least 50% more than the sum insured but being young and naive at the time I never thought to get him to put this in writing (I am sure he wouldn't have done it anyway!) When I did write and complain to The Pru I was informed that the agent who sold me the policy was working for a private company and therefore The Pru was not responsible for his actions.

In 1986 Scottish Amicable were judged to be a 'good' endowment company - even several years later I was told that they were well respected and gave good value for money. Getting taken over by a giant like The Pru just allowed them to deteriorate - The Pru has obviously filtered away the value of these policies and merged them into their own less efficient policies.

In my opinion they are a bunch of shysters and I don't see how anyone can defend getting 12.5% less than 'promised' is one of the better stories. I am fortunate in that I don't have a mortgage to pay off but there are thousands ou there not in so good a position - so should I just count myself lucky? I don't think so - yes I have managed to achieve a good financial situation but The Pru have tried their best to negate my efforts.

Meeper

If an adviser said that someone was guaranteed to give returns of sum assured + 50% and you believed him and took out the policy, and that adviser didn't work for Scot Am or the Pru, how exactly is it their fault?

Froggitt

An update on this would be useful......not sure where the figures come rom or Id update it myself.

Quote:
2004 - 89% of endowments hit target (of those falling short, the average shortfall was £890)
2005 - 95% of endowments hit target (of those falling short, the average shortfall was just £49. The average surplus was £2409)
2006 - 96% hit target (average shortfall for those falling short was £700 and average surplus £2600).
2007 - 98% hit target (average shortfall for those falling short was £518 and average surplus was £3348).
2008 estimate - 98.2% expected to hit target with average suprlus of £2280 and those falling short, average shortfall will be £362

Talk about hitting the buffers..........

Aviva warns that only 2% of its 63,000 mortgage endowments maturing this year will reach their target. At Standard Life, 42,000 out of 44,000 policies will have a shortfall. Friends Provident warns 93% of policyholders can expect a shortfall, while at Axa Sun Life the figure is 71%.

makensie

Hi, I have approximately 2 years to run on my two Pru endowments (originally Scottish Amicable policies). I have red letters on both at present with predicted shortfall totalling £6K at 8% growth. How soon before the maturity date do you recommend that I try to get a final figure, including terminal bonus and special additional bonus, that my policies will realise? I have taken steps to cater for the predicted shortfall but would still like to find out an accurate figure as soon as is possible.

Thermoman

Don't know if this will help.
My policy was for £24000 and I've been quoted £23086

The terminal bonus was £6713.

When I called to ask if this included the sum promised from the Pruduential takeover I was informed that it was. I've asked for a breakdown to be posted to me - so should get this in the next week or so.

thebull

HI everyone would like your thoughts and comments on my situation please .
I took a scottish amicable endowment mortage out in 92 at a cost of £28.80 a month to repay a £18900 mortage ,since then I have been paid for been missold a endowment .I can remember getting something from the Pru (who took over my endowment and run it now) about scottish am but to be honest due to the passage of time and some grief I had at the time I cant remember what is what with regard to possibal funds on maturity off the policy .
Today i rang the Pru and asked for my surrender value and nearly took a bad turn when yhey said £8900 bearing in mind i have paid in around £6500.
Taking into account that I will be paying another £2000 till this policy matures and the fact that I have moved house and now have a repayment mortage which i shall use any money from the endowment to help pay off a lump sum .What would people on here do in my situation ? also how do I stand withe the Pru taking over Scottish amicable ?
Thank you for reading ..

hansi

I looked up the information I received about the Pru's takeover of SA which I kept. I received a fixed cash payment in 1996 and was told that a Special Added Bonus of x pounds would be added to the final payout. So i guess, Ive received it?

bluefrew2

It was a year ago when I got the same information as yourselves from the Pru concerning my terminal bonus. I registered a complaint against them and then took it to the Ombudsman. I'm still waiting for a decision but I must urge you to do the same as myself. We were promised a "further bonus" when the policy matured as part of the contract when the Pru took over Scot Am and this was laid before the Scottish Courts. The Pru cannot change this contract unilaterally. Even if the Ombudsman aligns with the Pru it is still my intention to go to the Small Claims Court and fight it out there.