Endowment

[Bahco]

I have a policy that is maturing in may after paying £ 42 a month for 25 yrs.

At the time of signing I was told that this level of premium would result in a good payout and that I would get a much better return than investing in a bank account.

I have received a statement which predicts that the sum will be a lot lower than expected and I'm not happy. The "profit" made on my premiums after taking into account inflation means that in real terms I have lost money!

I will be taking this further but I would be interested to know how much £42 a month saved in the bank would be worth today.

 

[Burnerman]

We are exactly in the same boat.....a smooth talking banker said we couldn't lose - we eventually changed for a pay back mortgage but kept the endowment going. We were assured it would make the 30 grand - no worries. Its now worth 17 grand and matures next year. Thankfully our mortgage is long gone but if I could get a hold of our original 'adviser' he would be too.
John

 

[Bahco]

Hi John

Have a read of THIS. Might help you and others I'm sure are in the same position.

These companies try to renege on their promises made 25 yrs ago and most people will allow themselves to be fobbed off!

 

[LooPrEvil]

Bahco I am not wholly certain, but I thought appeals for endowments ended a year or two ago?

Have you not been receiving annual statements from your endowment provider indicating the anticipated level of return, and advising on what measures you could take to counteract any shortfall?

Something you have to bear in mind when comparing endowments against other financial products (ie bank rates), is the fact that an endowment ALSO provides life insurance for the policyholder(s). Therefore lets say you could have earned a £1000 more had you invested the money in a bank account, the cost of 25 years of life insurance will be taken into account, which will be deducted from the comparable £1000 and possibly mean overall you will not have lost out financially.

As John says, these financial advisors from years gone by, have a lot to answer for. I will guarantee they got their full commission for advising you to take the endowment policy.

Lou.

 

[LooPrEvil]

Based on the link you have just posted, you can try to take some sort of action, but did you get the annual statements and advice?

Lou.

 

[Bahco]

Based on the link you have just posted, you can try to take some sort of action, but did you get the annual statements and advice?

Lou.

I was always told that the final figure would include bonuses that would be added on maturity.

 

[Burnerman]

My thanks to you Bahco for finding this info for me.
Trouble is, you can only complain about the advice you were given at the time of taking out the endowment and I just don't know how this can possibly be proved as those that did the recommendations have long gone
Its not the first time I've been stung by following bank advice re investments etc - never again! These people are completely unaccountable and have no moral concience.
John

 

[libby lou lou]

Thought wrong, didn't i?.

 

[Burnerman]

Still ranting, but I was stuck big time when the Northern Rock foundered.... lost over 10 grand overnight.
Ok, speculate to accumulate but this money was to take care of my old Mum in a care home after a stroke - thought I couldn't really fail.
It cost me nearly 50 grand to keep her there for just over 2 years and funds were running short. Anyway, she died - which was probably just as well.
John

 

[Bahco]

Trouble is, you can only complain about the advice you were given at the time of taking out the endowment and I just don't know how this can possibly be proved as those that did the recommendations have long gone

I'm sure you can remember what sort of sum was promised / implied by the salesmen. Stick to your guns.

There are companies out there that will fight your corner too.

 

[Burnerman]

Trouble is, you can only complain about the advice you were given at the time of taking out the endowment and I just don't know how this can possibly be proved as those that did the recommendations have long gone

I'm sure you can remember what sort of sum was promised / implied by the salesmen. Stick to your guns.

There are companies out there that will fight your corner too.

I'll have the crack with Mrs B, who's much brighter than me
Thing is, anyone who will fight my corner for me is out for their own gains more than mine. Nowt new there then!
John

 

[LooPrEvil]

John sorry to hear about the issues that you have had to face since the failure of NRock and the consequences for your mother.

Re the endowments, is it worth contacting the FSA direct for advice?

Good luck to Bacho and yourself.

Lou.

 

[Stivino]

I had a similar policy that matured last year. It was an endowment costing £38.10/month and was over 25 years. In total £11,430 was paid in. I think it came out at about £21,000, I was looking for at least £40,000 from it.
Every year the bonus certificate showed the profits and said it was on track. When challenged, they said that the last couple of years had been bad. But, it had been on track for 23 of those years, did they lose all my profits in the last couple of years.
The twist in the story is that, when I took it out, I was working for the company and I sold it to myself, I got paid the commission and I know what it should have paid out.

 

[PrenticeBoyofDerry]

I will be taking this further but I would be interested to know how much £42 a month saved in the bank would be worth today.

I read somewhere, so don't take this as gospel.
That the average interest rate over the last 25 years works out to be 5.25APR
So it would be somewhere in the region of £26K
According to my unprofessional calculations

 

[Richard C]

Got a 25 year £43/month coming out in July. On the strength of previous performance of an earlier policy that matured in 2001, I was expecting to get around £80k but last years statement said £28k which doesn’t even cover the £33k mortgage that was secured on it.

Word of warning; if it’s a 25+ year policy, you will almost certainly get no truck from the financial ombudsman fund, they won’t consider a claim as being “sold unfair” because the policy was taken out before the FSA came into being; believe me I've tried. Grin & bear it is all you can do unless you know something I dont & can give me any other hope