Endowment Mortgages - claiming compensation

[saltire]

Does anyone have an endowment mortgage and succesfully claimed compensation. If so, how easy was it to get it.
We have been going through the papaerwork for our Endowment mortgage, and there is , written in our financial advisors handwriting the words
"recommend endowment mortgage, etcetc"
Wondered if this would be enough to claim as we are going to be short by about £10,000

Yes, we did. You can complain to the adviser's company or to your mortgage company. They will send you a form to fill in. You will only succeed if the adviser didn't explain that endowments aren't guaranteed and can result in a shortfall. I think there's a time limit and it's only valid for mortgages arranged after a certain date - 1980s or something? Go to the Which? Endowment Action campaign site - they've got a standard letter you can send. When we moved house, we changed ours to half-endowment (based on the worst-case projection) and half repayment. And the compensation was used to reduce the mortgage ie paid into our mortgage account, not into our hands.

there are set time periods (I think 3 years) to start the compensation ball rolling

The problem is that we haven't received a letter from our endowment company. When we moved up to Scotland in 2002 we notified them in writng that we had moved, now they say they never received it, and we had to phone to get them to send copies of all correspondence. I will check out the which site and see what they say

I got compenation -it takes a while and you have to stick with it - but, OH the relief when the money finally came through - I was SOSOOO gald to be rid of that wretched financial company.

Yes we claimed and eventually got compensation.

The first time we wrote they sent a letter back to us 'get lost' in so mant words. It was Abbey National so we though that must be right and that we had no claim.

But then we all the big fuss about endowments started Ithink the ombudsman forced all the companies to properly investigate all complaints.
So that meant we recieved a form , about five pages long, nd it was all about our fianancial hisory. They basically use it to see how risk averse you , because if you are risk averse then an endowment is not suitable for you. The question were things like

have you got any regular savings plans
have you bought any shares on the stock market
have you put plans into action to clear your mortgage short fall

We sent it back and they offered us about £4500. We accepted it because we were so shocked to be offered anything. It was a lot less than our shortfall though. Even if you get compensation they dont take care of your shortfall its more about giving you back your contributions.

So I think dont be put off even if you get knocked back at first.
You are talking about thousands of pounds so it really worth sending a few letters. Good luck !

Well we finally got a "red letter" from them today, telling us that we are going to be short by up to £19,000!!!. A few years ago we got a projection from them and it said that all their investments are on track.
So, do i complain to the IFA who sold us the policy, or the TSB who we have the mortgage with, or Prudential?
Also, to anyone who has claimed, do you still have your mortgage, and if so, what changes did you make ie did you change to a repayment, or did you do something else?
Thanks

ours was with Woolwich and we complained to them, they came back with some qs and then paid a largish chunk of cash into our mortgage which we kept with them but changed to repayment mortgage. Also got about 3k compensation.

had to be quite ballsy tho. You can also sell on endowments but we found we wouldn't get as much that route although would have been less hassle.

Hm, not sure what to do! Not going to go to a financial advisor though, its their fault we are having this problem.
meowmix, was it easy to change to a repayment mortgage?
This is probably a stupid question, but did you have to get the repayment mortgage for the original amount (eg £50,000), or did they deduct the amout you had already paid.

well we'd switched to repayment when we moved house so had to change the mortgage but it shouldn't be any harder than remortgaging. So we initially took out a mortgage of say £100k with endowment. Only interest was paid on that sum so it didn't go down. The compensation related to the endowment took it down by about £15k for sake of argument so now have a mortgage of 85k that we pay off monthly. Dunno if that helps?

Dont go via IFA - go direct. Just ring the customer services folk and they should be able to walk you through the process. Woolwich were actually very helpful in their own utterly incompetent manner.

Saltire we changed to a repayment as soon as we knew the endowment would never pay it off. I think that was quite relevent when we made the compensation claim.
Very easy to change to repayment, just ring them and they will send a confirmation letter for you to sign. You could ask to extend your mortgage by a few years if it makes the repayments easier. We actually shortened ours because we thought it would be better for us to be v poor for a while and sort out the finances.
We cancelled the endowmnet policy and we got a bit of money back on that ,which went straight into the mortgage.
Also when we got the compensation we put that straight in the mortgage.
We have now totally paid off our mortgage and that is Dh's dream come true !
It can be managed

If your endowment was incepted in Scotland the laws governing them are different and so are the time bars.

I suggest bringing it up w/the Ombudsman asap.

Saltire, we were in your position last year, though thankfully our losses weren't as big. We made an endowment claim through the WHICH site (Can't find it online atm, sorry). It was very simple to do, the company made no quibbles over our claim and gave us a fair compensation deal. We had already changed to a repayment mortgage by then.

Just spent 1 hour on the phone to Shantira (in Mombai) from Prudential. What a carry on, she couldn't understand what i saw saying and vice versa.
In 2002 we moved house to Scotland. We notified the Prudential in writing, Anyway i called them last week to find out why we haven't been getting our bonus statements, and they said they didn't have our new address BUT, in 2004 they sent us a letter (when all the things about endowmnets came to light) saying we would have a shortfall of between £7,000 and 9,000 on our policy, After seeking advice we decided to leave it as it was, as DH will get a payment when he leaves military, which would pay off shortfall.
The woman i spoke to today has denied that they sent this letter, and has no record of it!
They also sent today a bonus statement and review, which is effectively saying that the shortfall will be between 10,500 and 600. pounds. So how can they send a letter saying it will be £19,000 short then the following day tell me on the phone that it will be 10,500 short. I tried explaining this to Shantira but she "didn't understand what i was trying to say to her"!
Anyone advise where i can get some help to try and sort this out

One thing to keep in mind is that the compensation you get bears little resemblence to your shortfall.

What you get back in compensation is the extra you have paid by getting an endowment mortgage instead of a repayment (according to a standard formula).

For perspective, our shortfall was in the region of £45k on a £95k mortgage, and our compensation was about £3.5k. We checked the figures and it was fair, although extremely disappointing (understatement).

We took the compensation and also took the advantage of cashing in the policy with no fees. We thought that the cash-in plus compensation was reasonable for the amount of money we paid in. We took out a new mortgage 3 years ago, repayment, so we were not relying on the endowment. It was purely savings for us.