Endowment Mortgages what to do if you are worried
26/08/1999
If you have got an endowment mortgage and you are worried about whether it is going to pay off your loan, do not make any hasty decisions. The Financial Services Authority has brought out a free factsheet setting out your options, and explaining how endowment mortgages work.
Christine Farnish, Director of Consumer Relations said:
"Most people who have an endowment mortgage should find that it is doing the job perfectly well. If youre worried that the endowment policy will not grow fast enough to pay off your mortgage in full, dont cash it in without taking advice. Our factsheet explains how to check if your policy is on track, and tells you what to do if you think you were not given good advice at the time you took it out. And if you are still not sure what to do after reading the factsheet, do give our public enquiries helpline a call were there to help."
Inflation has fallen sharply in recent years and with it the expected future returns on insurance companies endowment funds. The FSA welcomes ABI plans to require its member companies to make regular premium reviews for mortgage endowments. This will make sure that anyone whose endowment is no longer on track to pay out a big enough sum at the end to repay the mortgage loan in full is forewarned so that they have the opportunity to take action. The premium review programme is due to start in September and follows discussions the FSA had with the ABI earlier this year.
There has been some speculation about certain police inquiries and their possible relevance to the many consumers with endowments. The FSA understands that the Metropolitan Police Service is currently investigating a small number of allegations regarding mis-selling of endowment contracts which relate primarily to endowments connected with commercial financing arrangements and not to the household mortgage endowments held by millions of ordinary homeowners. There has been, and continues to be, full co-operation between the FSA and the Police in relation to the cases concerned.
Notes for editors
The FSA (Financial Services Authority) is an independent body set up by government to regulate financial services and protect consumers.
Our public enquiries helpline can answer general queries about financial products and services, tell you if a firm or adviser is authorised and help you if you have a complaint and do not know who to contact. Their number is 0845 606 1234 (charged at local rate).
We also produce a range of user-friendly factsheets and booklets available from our leafletline 0800 917 3311, our website and from our offices.
These include:
FSA guide to making a complaint FSA guide to ISAs FSA guide to financial advice