Endowment shortfall

[scotgal]

For several years now we have been paying an extra �200 a month on top of our mortgage payments to try to recover a shortfall on our endowment policy. However in a recent statement from our endowment company the shortfall is still projected to be in the region of �7000. I'm very worried as the mortgage term finishes next year and my husband is due to retire 6 months later. Yesterday I had a phone call from a company who specialises in compensation for this and am very tempted but I really don't know about the pros and cons of this scheme. I had heard of this but had dismissed it on the grounds that we took out our mortgage during 1988 and this seemed the cut off point but the young lady who telephoned me yesterday said this was not the case. I would really appreciate some advice on this as she is phoning again today.

[sara3]

there's no harm in trying, but I think you should look at doing it yourself. I assume the company that called you will be charging you?
you have to prove that you were mis-led re the final payout of your endowment, but for me they just took my word when I told them the woman had said, "you'll be able to pay off your mortgage and have a tidy sum besides". (I was telling the truth!)
they calculated the difference between what the endowment would pay off, and what a repayment would have paid off, and paid out the difference. it wasn't great but it was a long time ago.
I'll see if I can find a web link for you, and best of luck.

[sara3]

http://www.moneymadeclear.fsa.gov.uk/news/prod uct/endowments/how_compensation_is_calculated. html

[DrFilth]

about 4 years ago i sent a letter to my building society complaining that i had been mis sold my endowment mortgage and got approx �2000 refund. i got my mortgage around the same date as you.have a look on google for free advice.



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ps mine is going to be approx �8000 short

[scotgal]

Thank you all for replying so promptly! Sara I can't in all honesty remember what was said in 1988 but I seem to remember the mantra of the time was that an endowment policy would pay off the mortgage and probably (because it is a " with profits" policy) pay out a little more besides. Anyway, thanks all. What I'll probably do is give the lady the details etc and decide whether to sign on the dotted line when the paperwork comes in as she said. That will give me time to google what I want to know as doc said. What grieves me more than anything isthat we didn't take out a big mortgage (�35000) and yet the policy which we pay �80 + per month has done so badly. The endowment is with Standard Life btw not some obscure company nobody's heard of. If I sound bitter and twised it's because I am!

[DrFilth]

i am with standard life


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[DrFilth]

http://www.moneysavingexpert.com/reclaim/endow ments-miss-sold


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[Tom Braider]

I had an endowment with Standard Life and got compensation for mis-selling by just asking for it! I just rang an advertised number (it'll have changed by now, I'm afraid) and they sent me a bunch of forms. I didn't have any of the info needed so I didn't send them back, To my surprise, they just assumed various answers and the next thing I knew about it was when they offered me a cheque. Of course I said yes, and the job was done. Don't pay anybody for getting this compensation until you've tried yourself.
As for making up the shortfall itself, I sold the endowment and took out a new repayment mortgage

[annie0000]

You do not need to go through a compensation company - all they do is send of a standard letter to the company and take a percentage of any compensation that you may get.

All you need to do is write directly to the company concerned.

However, you need to make clear that you feel that you were mis-sold the policy on the grounds that you were told that it would repay your mortgage - if that is the case. I am sure that there is a standard letter that you can use on Which website.

You may find though that your claim could now be time-barred. You only have a limited time to claim (3 years?) after receiving your 1st Red letter telling you of a shortfall. Your claim may also be compromised by the fact that you have already chosen to take action and pay more to your policy.

You need to act asap and contact both the lender and the company who provide the endowment. In the past you would have had an option to extend the mortgage, I am not sure what borrowing facilities will be available now.

[scotgal]

Thank you again everyone. Annie my husband subscribes to Which so I'll go on to their website for advice.

DrFilth you ain't my hubby are you?

[annie0000]

I don't think that you even need t subscribe scotgal - that is provided free.

Here it is:

http://www.which.co.uk/advice/mis-sold-endowme nts-how-to-claim/complaint-letter-generator/in dex.jsp

[scotgal]

Thanks for the link Annie and I have printed off a letter. Now it's presented me with another worry. You see our mortgage is with our bank who also sold us the endowment policy. What I need to know is if I make this claim will it compromise our current account for example as I've heard of people having their accounts closed down for daring to claim back overdraft charges etc?

[annie0000]

That should never happen. However, although the bank sold you the mortgage, you are complaining about the endowment which was sold through Standard Life - even if the adviser was employed by the bank, they were probably acting as an agent of Standard Lifeand therefore, the responsibility for the advice provided lies with Standard. It is not always quite that straightforward, but usually that is the case.

In any case, the FSA would not be happy as their big focus at the moment is on ensuring companys treat customers fairly and one of the key customer outcomes is that consumers do not face unreasonable post sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

If your bank were to withdraw any facilities, I would take them to FOS.

[scotgal]

Thank you Annie but I'm still a little confused. According to the Which template letter I am complaining to my bank - but should I be complaining to Standard Life direct? I am after all (by dint of this policy and my works pension) a shareholder anyway due to their flotation a couple of years ago.

[annie0000]

You should write to which ever organisation sold you the policy - the bank will pass it to Standard Life if they are responible for the advice or deal with it themselves if they were. Can you say which bank it is and I might be able to find out if they were a tied agent at the time. Might not be able to and it shouldn't matter, you just need to go to whoever did the sale - in this case probably the bank.

[scotgal]

Thank you so much Annie you're a star (or should I say three). My bank is the Clydesdale by the way and they could very well have been agents.

[annie0000]

Unfortunately I can't find out any info that far back, but currently clydesdale have their own authorisation - they also did have an independant IFA arm as well. All authorised firms have an obligation to pass complaints promptly to whoever is responsible, so if you right to the bank they will pass it on. As I said before, don't be too surprised if they come back and tell you that your complaint is timebarred. This was introduced for firms to be able to call a halt on complaints being received long after the customer was firts made aware of the problem. So it depends on when you got your first red letter. The fact that you took action and now are being presented with another Red letter( or is it amber?) may or may not make a difference either way, it depends on whether your additional contributions were set up as a new policy or as a top up to your existing one. Very complicated I know, but there are procedures set out for companies to follow to ensure that you should get a fair hearing.

[scotgal]

The additional payments are nothing to do with the endowment-I shoulve made that clear-they are to reduce the loan itself. I now realise that when the bank approached me regarding the shortfall (which they obviously knew about) that they were probably even then trying to cover their own backs. As i said before I'd never considered compensation because of the cut off date of 1988. I'm so much obliged to you for helping me out here and it never ceases to amaze me how many clever people there are on this site. (There are some numpties too but that's another story. Hee ,hee!)

[annie0000]

Hope all goes well Scotgal. As it is the bank that got you into this situation in the ifrst place - one would hope that they would be sympathetic to at least ensuring that you ghave sufficient borrowing facility available should you need to continue to pay your mortgage past its original end date. What you could do if the worst comes to the worst, is to take the remainder of your mortgage on an interest only basis and leave the capital outstanding. i..e. never pay it off until the house is sold. What you have at the moment is a mortgage that is part interest only and part repayment. the extra payments you are making are to reduce the capital, your original payments are paying interest and the endowment is saving to pay off the capital remaining at the end. It could be that you are looking at your endowments ability to pay of the entire original loan - which it wont, but not taking into account that you wont have the original loan left to pay at he end as you have been paying some of it off with the extra payments. Without seeing your statement, I can't tell which it is, but you can maybe work that out or phone the Bank to ask.