Complaint Agreed by Barclays

hays60

Hello Everyone

We took out an endowment 12 yrs ago with Woolwich Life - now owned by Barclays

This was for £58000

We then moved house and took out a 2nd endowmnt with Standard Life for £27000

We decided to complain about the Wollwich Policy as we were told we would have a cash surplus after 25 years

Without even having to fill out a form Barclays have upheld the complaint and offered compensation of £16,706

They say they have worked within the guidelines to effectively put me in the postion as if I had taken the repayment in the first place

What I can't get my head round is why then do I have to pay more per month to ensure it is repaid. Surely they should put me in the financial postion to pay off and my current level of payment ???

Regards

Paul

dunstonh

What I can't get my head round is why then do I have to pay more per month to ensure it is repaid. Surely they should put me in the financial postion to pay off and my current level of payment

The repayment mortgage costs more than the interest only mortgage. So your monthly cost would go up.

Also, at times, the interest only mortgage and endowment would have been cheaper than a repayment mortgage plus life cover. More so 10 years ago than now.

Many finacial services people, including myself, feel that the best approach would have been for any upheld complaint to remain on endowment but have a guarantee added to them to ensure full target. This would have been easier as people could carry on paying what they already do and have knowledge that they are going to get their mortgage paid. In addition, if market conditions improved, the insurance companies would not necessarily face as much compensation and individuals would not face a tax bill on the interest or a potential tax bill on the endowment surrender.

However, that isnt how the FSA decided these complaints should be dealt with.

MarkyMarkD

I agree with you wholeheartedly. There is no point working out a putative shortfall on policies with 10-15 years left to run, paying compensation (which, for mutual companies, just comes out of other policyholders' pockets) and incurring lost future profits on the policies. It would have been FAR better to add a guarantee clause, which might cost the institution nothing - effectively doing what Standard Life's promise was trying to do, but in a legally binding way.

IF markets pick up, many who have been compensated (and kept their policies, if they have done so) may end up making more than they originally expected, AND pocketing a load of compensation. Madness!

hays60

I should just add the compensation is around £6,000. The surrender value of the policy is stated at about £10,700

Would an IFA be able to advise me on this ?
The only incentive for an IFA might be I will need a decreasing term life policy for my wife and I

dunstonh

I should just add the compensation is around £6,000. The surrender value of the policy is stated at about £10,700

Would an IFA be able to advise me on this ?
The only incentive for an IFA might be I will need a decreasing term life policy for my wife and I

An IFA would be able to advise you on whether it should be surrendered or not. There are some variables to consider before you surrender, such as charges, taxation and alternative fund options.