Endowment mortgages The FSA warns public not to make hasty decisions
03/11/1999
A recent survey showed 500,000 households have endowment mortgages which would not pay for their homes. But the FSA today warned that if youve already got an endowment mortgage you shouldnt make any hasty decisions to surrender or you could lose out financially. To help worried consumers decide what to do the Financial Services Authority has a free factsheet setting out the options, and explaining how endowment mortgages work.
Christine Farnish, Director of Consumer Relations said:
"Most people who have an endowment mortgage will 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 consumer 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. Product providers now 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 informed about this.
Notes for editors
The FSA (Financial Services Authority) is an independent body set up by government to regulate financial services and protect consumers.
Our consumer 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 dont know who to contact. Their number is locall 0845 606 1234.
16,000 of the endowment factsheets have already been issued since it was first released at the end of August.
We produce a range of user-friendly factsheets and booklets available from our leafletline 0800 917 3311, our website at http://www.fsa.gov.uk/pubs/pibooklets.htm and from our offices.
These include:
FSA guide to making a complaint FSA guide to ISAs FSA guide to financial advice