endowment compensation

[Physicsgirl]

does anyone have useful advice about where to get advice on this subject, or which company to approach about surrendering the policy? I was sold it in 1997 as a way to pay off the lump sum of my mortgage. Is it even worth bothering with the enquiries about compensation?
Many thanks

[Ethel]

Have you had the 'red warning' letter from the endowment company to say there will be a shortfall?

[Physicsgirl]

Yes, I have. Was waiting to see if the new statement would have bonuses this year but no joy for the 5th year running.

[Ethel]

It might be worth a go if you can PROVE that you were never told that the value of your endowment may go down and not reach the target mortgage figure. You'll have to fish your paperwork out and read it all very carefully.

The statutory time limit is 6 years from the sale of the endownment (too late for you) or withing 3 years of knowing there is a shortfall. When did you receive your first red letter?

[LostSheep]

If you want to surrender your policy, find out the surrender value from the company and then have a look at this website to see if they can get a better value for your policy.

http://www.aap.co.uk/

[Physicsgirl]

many thanks all - will hit the paperwork and see what happens

[RTFishall]

Endowments did not make the values that were hoped for because generally interest rates and returns on company investments etc fell. However, the interest rates being charged on mortgages also fell. What people should have done is to pay off on their mortgage what they were saving each month on the lower interest rates being charged. Unfortunately, it is a case of "you can't have your cake and eat it"!
If you decide to surrender the endowment then shop around for figures, there are many companies specializing in buying policies.
(This comment is not meant under FSA as advice)

[Physicsgirl]

thanks. Have started shopping around, so I'll see what turns up. Thing is, if I sell it now I could probably combine it with other stuff and get rid of the mortgage .... happy days

[RTFishall]

If you can pay off the mortgage do so, it's a lovely feeling, I managed it last year at 61!
If your circumstances change in the future you can always raise money on the property if you really need to.
Good luck

[Ethel]

You will probably need the permission of your lender to surrender your endowment policy - do that before you do anything else.

[Physicsgirl]

good point, but the endowment is no longer linked to the mortgage. So I should be okay on that one. Is it worth gathering nearly all your savings to get the mortgage done with? Obviously, we'd keep some for "emergencies", but our savings should quickly mount up again if we have no mortgage to pay off. Thanks all.

[RTFishall]

Ethel is right in that people do need the permission of the lender to release any assigned endowment policy. However, I would be extremely surprised at any major lender in todays mortgage market refusing this!
Back to the question of whether to use your capital to pay off the mortgage. I would repeat Yes, Yes & Yes, until the day dawns that you can earn more on your savings (without any risk of loss) than the lender is charging you for the debt.
Also, the feeling that I now enjoy of sitting in my home and saying to myself "no blxxdy mortgage" is worth a lot.
As I previously said, if in the future you really have to, you could always raise a mortgage again.

[NORMANTHEDOG]

i would doubt that your policy is not worth anything above what you have already paid in,it has not been going long enough.

[annie0000]

you need to contact the adviser who sold you the policy. this may or may not be the company that the policy is with, but they need to be your first port of call. They will either investigate your complaint or tell you who the adviser was and pass your complaint to them. The majority of companies now time bar complaints, this is based on the date that you first received a red letter, so if I were you, I would contact them asap.

Whether you are entitled to compensation or not, depends on your reasons for complaining and the evidence available to back this up. For example , was it made clear to you that the policy may not pay enough to cover your mortgage?, were you promised a lump sum? Does the term go past your retirement date? Did you have any requirement for the life cover? If you are purely complaining about the performance of the complaint, you will not be entitled to compensation. Companies are strictly regulated and have a duty to properly investigate your complaint. You then have the option of going to the Financial Ombudsman if you are unhappy with the decision from the company.

You do not need to go through any of these companies that charge you to help you with your complaint and in fact, a lot of companies refuse to deal with them on the basis that they are not doing anything for you but are taking your cash. All you need to do, is contact the company in any form and tell them that you feel you were mis-sold the policy (for whatever reason you have) and they will then follow the process which has been agreed with the Financial Services Regulator.

[Physicsgirl]

Many thanks to all of you for your advice.