Endowment customers should prepare for shortfall

It appears that endowment policies have failed to deliver, as 86 per cent of consumers have been warned that their policies will not pay off the mortgage.

According to a new survey conducted by Fairinvestment.co.uk, an independent online finance portal, the majority of the ten million mortgage endowment policies sold in the UK during the 80s and 90s have left people searching to meet a significant shortfall.

Commenting on the results, chartered financial planner at Fairinvestment.co.uk, Sharon Bratley, said: "Our statistics just go to show what a let down endowment policies were and still are. Those who have not yet done anything and are expecting a shortfall on their policy should act now."

Ms Bratley has advised policy holders that they could sell as some investors still see endowments as a "desirable asset". Alternatively, he suggests policy holders may have grounds for complaint and be eligible for compensation.

Some policy holders face very real financial dangers with 23 per cent of people questioned admitting that they will need to cover 50 per cent of their mortgage.

The Financial Services Authority (FSA) believes there are still up to 700,000 people who have yet to take action to address the shortfall in their endowment policy.

Mortgages News posted on 19/05/2008 16:40:27