If you know someone who lost a lot of money during the surge of mis sold endowments in the recent decades, there are actually some excellent United Kingdom-based resources you might want to keep in mind for any future financial sector-mishaps.
The authorities came together to provide these for the public and, for once, they do work! Be sure to inform yourself about endowments and what they're all about, and become aware that endowments, themselves, weren't/aren't really the problem, as long as you know what you're doing with them.
I have a few friends who do quite well with endowment policies, and reap all of the awards they promise.
The endowment policy you purchased to form the crux of your mortgage payment plan is steadily approaching maturity, and unfortunately looks like it will fall well short of the initially projected return.
As unfortunate as this is, you are not alone, as the government (United Kingdom) released shocking estimates that well over eight million such policies would not be able to cover mortgage loans, leaving few options for those that had not only expected this to happen, but to also gain a sizable sum of cash.
After all, this is what was sold to them lock, stock and barrel by investment advisers at the time they purchased the policy.
Other than remortgaging, which is what most have done, are there any other options? Considering that the lending company is required by law to inform you periodically of the continuing performance of your portfolio; in this case, your endowment mortgage, you should be well aware of an impending shortfall, and additionally should have received a letter virtually inviting you to complain about it, which is the first crucial step in the only alternative to merely remortgaging that you have.
Acting in a prompt fashion is quite necessary here, as your insurance company/lender need not honor complaints that come to late after the letter they sent out.
In the case of mis selling, the Financial Services Authority has taken steps to not only protect you from further damage (by forbidding your insurance company to offer any advice whatsoever as to a recourse in the so-called "shortfall letter" they should have sent you, thereby eliminating a conflict of interest), but also to try and rectify the current situation.
Because 60% of endowment mortgages were mis sold, the FSA took it on as a serious problem, and set about ensuring a series of actions on the part of the consumer, which must be taken to receive compensation intended to leave you where you would have been had you not been mis sold, and had simply bought a normal mortgage loan.
The steps and conditions: 1.
Write a formal letter of complaint to the company and advisor who sold you the endowment mortgage.
2.
Contact the FOS - Financial Ombudsman Service.
Follow the directions on their website.
Be aware that the complaints only have a good chance of leading to compensation - if not outright reimbursement - if you were ignorant of the risks involved in the policy when it was (mis) sold to you, or if the endowment mortgage or policy simply was nonsensical to buy at the time it was sold (as determined by your expressed need and market conditions).
It is important to note that over 40% of endowment mortgage complaints brought to the attention of the Financial Ombudsmen Service have been resolved favorably; however, be sure to first contact the issuing company before this last resort.