Serious financial advice needed - Endowment policy disaster!

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Serious financial advice needed - Endowment policy disaster!

11 posts & 9 voices | Started 1 year ago by jj55 | Latest reply from spacemonkey

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jj55 - Member

I'm now into the last 3 years of my 20 year endowment policy for my mortgage. It's on track to leave me about £12k short. To say it's been a disaster is an understatement. It's with legal and general. I tried the compensation route, but failed. I'm paying about £1350 a year into it, and my statement today tells me it's only grown by £350 over the last year . When I phoned the company last year I was persuaded to leave it as financially it was better for me to keep paying and let it mature and not to cash it in early , but it seems madness, and I'm hopeless with finances!

I'd like to get my hands on the slick salesman who sat at my kitchen table 17 years ago with tales of great profits when the policy matured!

Any financial whizz kids on here with some pearls of wisdom!

Ar$e wrong forum, OK what tyres for bankers!

Posted 1 year ago #
Bikingcatastrophe - Member

Not sure I can add much qualifiedd advice here but if it was me I would be thinking about extending the mortgage and instead of throwing money down the toilet at the endowment I would probably do something dull like convert the mortgage to part repayment and the balance on interest only and see how quickly you can cover the deficit off. Is that how much you have been paying into the endowment for the life of it or were you persuaded to top up the payments once it looked as though it wasn't going to mature?

Posted 1 year ago #
jj55 - Member

This is how much I have been paying in since it started, but I've been slowly paying off the capital as well - it's painful!

Posted 1 year ago #
theotherjonv - Member

I'm no expert and certainly unqualified but in the year when we came out of recession, to pay in £1350 but only see a £350 increase doesn't seem right. Is that an up to date statement, or have you just got round to looking at it and the data is months old?

Second what was said about talking to the mortgage co (or an IFA). Don't just wait until the end date, get the info from the endowment and a realistic projection on today's rates what your shortfall is and then see what the mortgage co will do for you. You might be able to extend your term, or take a small short term mortgage to cover the projected shortfall. I don't know your circumstances but £1350 a year = £115 a month roughly which is dead cheap, hopefully you have some extra per month you can throw at it.

But most of all, don't panic, speak to someone asap and sort it. If you're a good payer over the last 17 years I think highly unlikely they'd want to screw you over now.

Posted 1 year ago #
Drac - Moderator

I'm not an expert but I'd get a mortgage to cover the £12k plus the rest and continue to pay the same amount per month, it should be gone in no time.

Posted 1 year ago #
uplink - Member

Just go and see an IFA soon
From what you've said, they're sure to come up with a solution that saves money for you

Posted 1 year ago #
Stu_N - Member

Given the amounts involved it might be worth spending a couple of hundred quid on some advice from an IFA rather than asking us.

In very general terms, if it's a "with-profits" policy you might be better staying put at this stage in the game as they tend to give you a fairly hefty hit if you surrender early. Unit-linked (sometimes also called non-profits) policies tend not to carry such high exit penalties so you might be better getting out, or at least stopping putting more money in and saving elsewhere (stocks and shares ISA, for example).

Really, only thing I can say is get some proper advice.

Posted 1 year ago #
allthepies - Member

http://forums.moneysavingexpert.com/showthread.php?t=3242076

Not too sure what that's all about but worth a read in your situation ?

Posted 1 year ago #
shadthebad - Member

You say that you tried the compensation route and failed. If you complained of mis-selling within the time limit, then the endowment would have performed as well as or better than a repayment mortgage at this point within the term of the policy.

Your complaint closure letter should have pointed out this and at this point you could have reduced the risk by switching to repayment method for your mortgage.

If you didn't get all this from Legal & General at the time, then sounds like reason for another complaint. They should have also explained that if you were not happy with the resolution then you could have taken it to the Financial Ombudsman Service (FOS).

You haven't said when you complained. Your endowment will be somehow linked to the stockmarket. You may have noticed that there is a lot of doom and gloom about the economy at the moment which is why your endowment is not performing as hoped. You need to have a think how the stockmarket is going to perform over the next 3 years. If the economy improves and the stockmarket grows then you should see a larger growth in the value of your endowment. The largest growth of any policy is in it's final few years. You may even get a termination bonus when it matures.

Posted 1 year ago #
jj55 - Member

Thanks for the advice....... it just seems I'm throwing good money after bad at the moment!

Posted 1 year ago #
spacemonkey - Member

Defo check out Money Saving Experts - mortages and endowments forum.

Plenty of folk on there know their onions.

Posted 1 year ago #

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