Endowment Mortgage?

An Endowment Mortgage is actually a misnomer. If you bought one – and 8.5 million people did* – you actually acquired an interest-only mortgage and a ‘with-profits’ or ‘unit-linked’ investment. You were probably told at the time that the Endowment Policy would eventually not only pay off the mortgage at the end of its term, but also provide an additional lump sum.

Unfortunately millions of customers have ended up with an Endowment shortfall. Not only was the promise of a lump sum broken but also, more critically, the endowment return wasn’t enough to pay off the mortgage it was intended for.

To quote Martin Lewis: ‘Endowments paid large commissions to advisers. They weren’t transparent. Worse still, to make them look cheaper than repayment mortgages, the payment amounts were often set up at a low level, hoping for unrealistically big investment returns.’

The advisor should have warned you that the endowment might not grow big enough to pay off your mortgage or provide an additional lump sum by the end of the term. The Financial Services Authority (FSA) states: ‘A firm must pay due regard to the information needs of its customers, and communicate information to them in a way which is clear, fair and not misleading’ (Principle 7 – Communications with customers).

Clearly, this was not the case in the selling of many Endowment Mortgages.

It’s important to note that you can only complain about the way your Endowment Mortgage was sold to you – not its performance. The poor performance of the investments used to support endowments simply demonstrates the poor advice at the time of sale.

Time-barring of claims

When the FSA agreed the rules governing the endowment mortgage compensation claims processes, it was decided to set a time limit for policy holders to make claims. So long as the company that sold the policy has gone through a pre-defined process of issuing warnings by letter, then it was agreed that a time-bar could be implemented to block open-ended future claims. Under the FSA rules, endowment mortgage holders were told that they had to complain within three years of receiving their first warning letter, or within 6 months of receiving a second warning ‘red’ or ‘amber’ letter – whichever comes last.

Understandably, you may feel you’ve missed your chance to claim and will never see the compensation that’s rightfully yours. Rest assured, EMCAS employs time-bar specialists who are regarded as the best in the business at overturning time-bars. In many cases we can persuade firms to re-open their investigations by lodging a new and different complaint or by demonstrating that their rejection letter was in some way negligent.

If you feel you were mis-sold an Endowment Mortgage – or are simply unsure – give us a call.

* BBC News – Endowment Mortgage Shortfall

Our Fee

Our fee is 35% +VAT of any compensation arising from any claim made by us on your behalf for alleged mis-selling of an Endowment Policy.

Our intial telephone assessment is provided FREE OF CHARGE WITH NO OBLIGATION

We do not charge ANY upfront fees

We operate a 'no win, no fee' policy*

*Subject to our Terms of Engagement; please refer to Sections 4 and 12 for full details.