Endowment Shortfall?
Discussion
Hi
There's no real doubt now that our endowment will fall awy short of expectaions, and less than the loan value. Not the end of the world and we can plan round it, but certainly not what was expected.
There seems to be a whole load of companies now offering forms of compensation etc. I've always avoided these sort of things like the plague, and consider most of these no-win no fee setups little more than ambulance-chasers.
....but if there is the chance of getting a bob or two back I could easily compromise on my scruples. So, is it worth the effort? Do any of these businesses actually stand a chance of getting any form of financial compensation or whatever? Anyone dealt with one?
WB
There's no real doubt now that our endowment will fall awy short of expectaions, and less than the loan value. Not the end of the world and we can plan round it, but certainly not what was expected.
There seems to be a whole load of companies now offering forms of compensation etc. I've always avoided these sort of things like the plague, and consider most of these no-win no fee setups little more than ambulance-chasers.
....but if there is the chance of getting a bob or two back I could easily compromise on my scruples. So, is it worth the effort? Do any of these businesses actually stand a chance of getting any form of financial compensation or whatever? Anyone dealt with one?
WB
If you were mis-sold the original endowment policy, you can write to the company involved in the first instance, asking for redress. If they are not interested, then complain to the ombudsman. You'll have lots of forms to complete etc, but it should be worth it. We went through the process last year and were happy with the result. The company ended up paying us the difference of what would have been paid on 'repayment' only + compensation for mis-selling.
By doing it all ourselves, we didn't have to pay any of these dubious claim firms!
Email me if you want more details.
By doing it all ourselves, we didn't have to pay any of these dubious claim firms!
Email me if you want more details.
percy said:
If you were mis-sold the original endowment policy, you can write to the company involved in the first instance, asking for redress. If they are not interested, then complain to the ombudsman. You'll have lots of forms to complete etc, but it should be worth it. We went through the process last year and were happy with the result. The company ended up paying us the difference of what would have been paid on 'repayment' only + compensation for mis-selling.
By doing it all ourselves, we didn't have to pay any of these dubious claim firms!
Email me if you want more details.
But how do you classify 'mis-sold'? All the models showed that it would pay off the loan and some - but like all these things there were the caveats that rates could change etc., but we were - at the time - left with the impression that we'd have a surpluss.
Plus I've had a letter from them which, reading between the lines, says don't bother claiming as although the endowment won't cover the shortfall, if you had paid the same cash into an repayment you'd be no better off so you haven't really 'lost'. May be true, but my arguement would be that if it was a repayment mortgage I would have been paying the lower figure - I'd have boosted the monthly payment so it did repay it and would have spread the load over the last 10 years.
So, and hints on what to ask for to 'redress' the situation gratefully accepted. And how do I find out the difference of what would have been paid on 'repayment' only and the endowment?
WB
Do a search on here, it has been discussed on here before. The best website to read is the Which one which even drafts a complaint letter for you to send.
I just wrote to my endowment company advising why I thought I had bee missold, was told there would be a surplus, wasn't told about the risk etc, and after a few weeks they agreed I had been missold. Just waiting for them to offer any compensation if appropriate.
With my wifes we wrote but they said we were out of time, so just considering whether to go to the FSA.
But plenty of information in past threads.
I just wrote to my endowment company advising why I thought I had bee missold, was told there would be a surplus, wasn't told about the risk etc, and after a few weeks they agreed I had been missold. Just waiting for them to offer any compensation if appropriate.
With my wifes we wrote but they said we were out of time, so just considering whether to go to the FSA.
But plenty of information in past threads.
Your questions are best covered here: www.financial-ombudsman.org.uk/faq/mortgage.htm#7
All in plain english, too.
All in plain english, too.
tvrolet said:
There seems to be a whole load of companies now offering forms of compensation etc. I've always avoided these sort of things like the plague, and consider most of these no-win no fee setups little more than ambulance-chasers.
....but if there is the chance of getting a bob or two back I could easily compromise on my scruples.
Few concepts get me more annoyed than compensation culture even more so when I see it on PH from people who normally complain every time they hear of some numbie claiming compensation. But believe it is deserved for the alleged miss selling of endowments.
So before we all say you poor old chap lets look at some facts and particularly the ones Which magazine, the FSA etc over look.
So FACT endowment policies where cheaper that the similar repayment mortgage, so may people where able to buy houses or bigger houses that they could with out the product.
So FACT when they where sold the UK had seen going though a long period of high inflation and high interest rates and no one expected this to change, indeed “Which” magazine pushed these mortgages as good buys.
SO FACT due to the Thatcher reforms interest rates have fallen and now the value of your endowment is less than expected.
SO FACT you invested the mortgage in property which due to this fall in interest rates is now worth far more than you ever expected.
SO FACT you have done very well out of the overall decision.
SO FACT who is paying this compensation the share holders of the insurance companies who are.:-
a) Me via my pension plan, and i who sorted out my endowment mortgage years ago when it was clearly not worth it and
b) lots of other pension holders who will never make the gain on houses you have.
SO FACT you do not deserve compensation.
So before we all say you poor old chap lets look at some facts and particularly the ones Which magazine, the FSA etc over look.
So FACT endowment policies where cheaper that the similar repayment mortgage, so may people where able to buy houses or bigger houses that they could with out the product.
So FACT when they where sold the UK had seen going though a long period of high inflation and high interest rates and no one expected this to change, indeed “Which” magazine pushed these mortgages as good buys.
SO FACT due to the Thatcher reforms interest rates have fallen and now the value of your endowment is less than expected.
SO FACT you invested the mortgage in property which due to this fall in interest rates is now worth far more than you ever expected.
SO FACT you have done very well out of the overall decision.
SO FACT who is paying this compensation the share holders of the insurance companies who are.:-
a) Me via my pension plan, and i who sorted out my endowment mortgage years ago when it was clearly not worth it and
b) lots of other pension holders who will never make the gain on houses you have.
SO FACT you do not deserve compensation.
Mrr T
I quite agree that people nowadays do not like to take responsibility for their own choices.
However, many people, ignorant of their alternatives, have been sold endowment policies without being properly informed that the policies might not pay off their mortgage.
A colleague - a little older than me - said that it used to be very hard to get anything other than an endowment mortgage. He has a pension mortgage which he had to be quite insistant on.
I quite agree that people nowadays do not like to take responsibility for their own choices.
However, many people, ignorant of their alternatives, have been sold endowment policies without being properly informed that the policies might not pay off their mortgage.
A colleague - a little older than me - said that it used to be very hard to get anything other than an endowment mortgage. He has a pension mortgage which he had to be quite insistant on.
Its not the amount of value that they told you it could be that determines compensation.
Its if they tell you that it certainlly will pay off your mortgage. In that did they lie to you to get the business if not then just because it didnt make the full amount is not something that needs compensating.
Its if they tell you that it certainlly will pay off your mortgage. In that did they lie to you to get the business if not then just because it didnt make the full amount is not something that needs compensating.
rsvmilly said:
Mrr T
I quite agree that people nowadays do not like to take responsibility for their own choices.
However, many people, ignorant of their alternatives, have been sold endowment policies without being properly informed that the policies might not pay off their mortgage.
A colleague - a little older than me - said that it used to be very hard to get anything other than an endowment mortgage. He has a pension mortgage which he had to be quite insistant on.
Yes it was but read my post. How much is his house now worth?? far more than he ever imagined and all because his endowment policy is worth less than expected. Perhaps I deserved compensation as I sorted out my finances. I demand to be compensated because I was not a numby.
reminds me of the mis-sold pensions saga, when employees were persuaded to switch out of final salary schemes into annuity-based schemes ... clearly, they were swindled out of their savings.
it's not so clear to me how you can be mis-sold a mortgage. if you were clearly told of the risks of a 'shortfall' then you don't really have a leg to stand on - risk and reward etc. obviously someone switching out of a simple repayment scheme into an endowment when they didn't need to may have a case(?)
fido said:
reminds me of the mis-sold pensions saga, when employees were persuaded to switch out of final salary schemes into annuity-based schemes ... clearly, they were swindled out of their savings.
it's not so clear to me how you can be mis-sold a mortgage. if you were clearly told of the risks of a 'shortfall' then you don't really have a leg to stand on - risk and reward etc. obviously someone switching out of a simple repayment scheme into an endowment when they didn't need to may have a case(?)
Surely if you were told it would pay off your mortgage and it doesn't then some redress is required.It's like being sold a toaster that won't work..it's not fit for purpose.As most people are not 100% financially savvy then surely the "advisor" that sold the product (endowment) is at least in part responsible?
Mrr T said:I think you are combining two separate arguments.
Mrr T
I quite agree that people nowadays do not like to take responsibility for their own choices.
However, many people, ignorant of their alternatives, have been sold endowment policies without being properly informed that the policies might not pay off their mortgage.
A colleague - a little older than me - said that it used to be very hard to get anything other than an endowment mortgage. He has a pension mortgage which he had to be quite insistant on.
Yes it was but read my post. How much is his house now worth?? far more than he ever imagined and all because his endowment policy is worth less than expected. Perhaps I deserved compensation as I sorted out my finances. I demand to be compensated because I was not a numby.
To use an analogy, if you bought a train ticket to Leeds but only got to Sheffield then the product, in this case the train service, doesn't do what it should.
You are saying this is offset by the increase in house prices but since the value of the house is notional until you actually sell it, how does this value help the mortgagee who is now in the position of having to raise an extra loan?
esselte said:
Surely if you were told it would pay off your mortgage and it doesn't then some redress is required.It's like being sold a toaster that won't work..it's not fit for purpose.As most people are not 100% financially savvy then surely the "advisor" that sold the product (endowment) is at least in part responsible?
But neither where they told that there house price would increase so much, so prehaps they can give some of that gain back to me.
Mrr T said:
esselte said:
Surely if you were told it would pay off your mortgage and it doesn't then some redress is required.It's like being sold a toaster that won't work..it's not fit for purpose.As most people are not 100% financially savvy then surely the "advisor" that sold the product (endowment) is at least in part responsible?
But neither where they told that there house price would increase so much, so prehaps they can give some of that gain back to me.
House price gain is another thing altogether.The product was incorrectly sold.Maybe the insurance companies could give some of their profits back to you?
>> Edited by esselte on Wednesday 21st September 16:46
Hi
Mrs Seb here. I make decisions on and calculate any compensation that may be due on complaints concerning mis-sold endowments, so may be able to help out a little :-).
As has been said, take a look at the FOS, FSA and Which? websites to see if you have been mis-sold. I can try to answer any further questions you may have. There is absolutely no need to go through a complaint handling company.
Email me via Mr Seb's profile if you would like to discuss specifics off forum.
Mrs Seb here. I make decisions on and calculate any compensation that may be due on complaints concerning mis-sold endowments, so may be able to help out a little :-).
As has been said, take a look at the FOS, FSA and Which? websites to see if you have been mis-sold. I can try to answer any further questions you may have. There is absolutely no need to go through a complaint handling company.
Email me via Mr Seb's profile if you would like to discuss specifics off forum.
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