Norwich Union endowment

grahalex

My endowment with the Norwich Union isn't linked to a mortgage , it was taken out in 1984 and there was definetly no mention of a shortfall.In fact I'm sure I was told that you get double your return with an endowment.My last policy update says I will be £3600 short of my £ 16000 target at 4% growth.The last bonus I recieved was a palrty £25 , in the past I used to regulary get over £300.Should I keep this policy going as a savings vehicle or cash it in?Also should I make a claim for misselling ?

dunstonh

The last bonus I recieved was a palrty £25 , in the past I used to regulary get over £300

There has been a stockmarket crash which has yet to recover. You cant expect big bonuses every year. You shouldnt forget that the annual bonus is just one of three bonuses that can be added. Ignoring special bonuses, you also get final or terminal bonuses. You havent mentioned what your final bonus is yet. Projections, on conventional plans (which yours is likely to be), do not normally include any final bonus in them. This can underestimate the projection figure and give a shortfall when there isnt one.

Should I keep this policy going as a savings vehicle or cash it in?

You are not going to get an answer here or anywhere else on the internet. Some may give an answer but they are doing it without knowing facts about the plan. Often when questions are asked about the plan to get more information, some very important ones are missed off.

Also should I make a claim for misselling ?

Who are you going to complain too? It needs to be the company that advised you. Not the product provider (unless it was a tied agent to them). Given the year you took the policy out, your options to complain would be limited depending on where you got the advice from.

A few things to note.

Policies commenced before 13 march 1984 get LAPR tax relief.
Your terminal bonus could put you back into surplus. (i have seen a number of endowments showing shortfalls prior to maturity but pay a surplus on maturity)

It could be that you should still surrender the plan but there are often reasons why you should keep one going and the projection should not be the only consideration as they are often misleading when used with conventional with profits plans.

EdInvestor

grahalex wrote:

Should I keep this policy going as a savings vehicle or cash it in?Also should I make a claim for misselling ?

Hello grahalex. Post some info about the policy so we can take a look.

Guaranteed sum assured
Bonuses so far
Surrender value
Maturity date
Monthly payment
Terminal bonus amount in surrender value (if available)


Re complaints, who did you buy the policy from in 1984?

grahalex

Guaranteed sum assured £5680
Bonuses so far £5587.80
Surrender value not known
Maturity date 22/10/2009
Monthly payment £20.84
Terminal bonus amount not known,probably won't know till policy matures

All the above info is from my 2003 bonus statement,its the latest one I have.

I bought my policy through The Leeds Permanent Building Society , I'm a bit fuzzy over the details,it might have been a broker or tied agent.

YorkshireBoy

I've been watching this thread with interest as your NU endowment is VERY similar to mine in all aspects.

You may be worrying unnecessarily - I'll explain later*. Meanwhile, here are my details on an NU WP policy designed to repay the £14,900 interest-only mortgage on my first house...

Started...............................1982
Premium............................£20.17

Sum insured.......................£6,154
Total regular Bonus.............£7,433
Total guaranteed payment...£13,587

If investments grow at 5% (mid-range figure) until Jan 2007, my policy is projected to pay out £16,200, and leave me with a £1,300 surplus. Not fantastic, bearing in mind at one stage it was on course to pay out over £20K, but it looks like it's served it's purpose after 25 years.

I have 2 other smaller policies (taken out in 1983 & 1987), one of which has not performed as well but they will still aggregate to a small profit.

*Bear in mind I'll only get 4 years in which to recover the losses from a couple of years ago - you've got over six years and barring any disasters "should" stand a better chance of recovery than I did (obviously allowing for any high growth I had between 1982 & 1984).

Finally, it sounds like you've obtained official projections (although they're nearly 2 years out of date). You can ask them at any time to give you another projection, or visit https://www.norwichunion.com/lifeinbonus where they have a table of final bonus's that are currently being paid on policies of various ages - although of course these are not guaranteed.

Hope this helps (and don't make any decisions based on what I've written above - it could be rubbish!).

Edited to add: Forgot to mention that during the early years my premiums were £23.40 due to tax relief being given (well, it was a long time ago!). Having said that, they "should" have taken this into account when setting premiums for policies taken out later.

EdInvestor

Grahalex

Can't help without the surrender value.You will need to ring up and ask, also ask them how much of the S/V is made up of terminal bonus (amount or percentage of total.) From YB's link, looks like they are currently paying 25% for 1984 policies.

Re complaints, the Leeds BS was taken over the the Halifax, now HBoS. Pre regulation in 1988, it was probably responsible for the sale, and large institutions like this owed a "duty of care" to customers under the previous legislation.

Thus it's probable ( I wouldn't go so far as to say definite, it being HBoS :rolleyes:) that they would consider a complaint, rather than bin it as an IFA would be able to do.

grahalex

I will call Norwich union tomorrow to get up to date info, surrender value etc.I should get my 2004 bonus statement sometime this month.

I had an update letter in Dec 04, if my investment grows at 5% I will have a shortfall of £2900 !

FOSman

EdInvestor wrote:

Re complaints, the Leeds BS was taken over the the Halifax, now HBoS. Pre regulation in 1988, it was probably responsible for the sale, and large institutions like this owed a "duty of care" to customers under the previous legislation.

Thus it's probable ( I wouldn't go so far as to say definite, it being HBoS :rolleyes:) that they would consider a complaint, rather than bin it as an IFA would be able to do.

Its called voluntarty jurisdiction. If an IFA sold it, then you can complain, but don't expect them to do anything about it. If its HBoS, then you might get a result, but I'm not sure 1984 sales were covered. Either way, you'll find out when you try.

As for the policy itself...it might be doing better than you think, given its age. Get the info everyone on here is asking you for. SV value etc..

grahalex

As a matter of interest my brother had a Norwich Union endowment, and he made a claim for misselling with one of those companies that does all the work for you.He recieved a cheque for £3500 ,but had to pay about 20% commision.

dunstonh

Dont forget to ask for the amount of final/terminal bonus on the plan as that will not be included in the figures. You really do need to know what that figure is.

he made a claim for misselling with one of those companies that does all the work for you.He recieved a cheque for £3500 ,but had to pay about 20% commision.

So he paid £700 for something that took about 10 minutes to prepare.

Just looking at your figures...you have paid in around £5251 (either net of tax of gross depending on if you have LAPR or not), with about £1000 to go. Its worth a minimum of £11267 plus any further annual bonuses and the final/terminal bonus (which we still dont know).

grahalex

Your correct dunstonh , but it was suppose to achieve £16000. I will ask Norwich Union for terminal bonus figures tomorrow, but it does say on the statement that terminal bonuses are not guaranteed.Would it really take only 10 mins to prepare a claim for an endowment misselling ?