FSA urges consumers to act now if they have an endowment shortfall

Anna Bradley, FSAs Director of Consumer Division, said:

"The vast majority of people are aware of the concerns regarding mortgage endowments. Most have either taken action or have decided that they need not worry. There are however a small but significant number of people who have yet to face up to the fact that a shortfall now could lead to financial difficulties later."

"Concerns regarding endowments have dominated the mainstream media so we decided to find some more unusual channels to try and get our message across to these policyholders."

As well as the GP surgery distribution network and advertising, posters will be sent to libraries, citizen advice bureaux and local authority offices, as well as targeting regional press and radio. The message urges policyholders, who have yet to do so, to take the first step and find out where you stand.

This latest publicity forms part of a long running awareness-raising exercise by the FSA to ensure consumers are fully informed about mortgage endowments concerns and the options open to them. The factsheet accompanying the initiative is Your endowment mortgage have you acted yet? Other initiatives include FSA factsheets being sent to every household with a mortgage endowment policy and access to the FSA helpline on 0300 500 5000 and website information.

The publicity will coincide with the current mailing being carried out by insurance companies updating consumers as to whether the money saved in their endowment policy is on track to repay their mortgage. So far everyone with a mortgage endowment (around six million people) has received at least one such letter from their insurance company advising them as to whether their endowment is on track to cover the cost of their mortgage.

Notes for editors

1. Over the last three years around 11 million letters have been sent out by endowment providers to an estimated six million households. The third mailing from the product providers updating people on whether their endowment is on track to repay their mortgage is now underway.

2. A survey of policyholders attitudes - Mortgage endowments the consumer - last year found that the vast majority (99%) of mortgage endowment policy holders are aware of concerns about mortgage endowments. Most are making informed decisions about what action to take (e.g. taking steps to make good a potential shortfall, complain about mis-selling).

3. So far more than 690m in compensation has been paid/set aside by 24 firms for approximately 434,000 consumers. In addition by the end of June 2003, product providers had received nearly 295,000 complaints, of which 60% were upheld, and had paid compensation of 307.5m.

4. The FSA produce a range of booklets and factsheets: Endowment mortgages complaints, Your endowment mortgage have you acted yet? Your endowment mortgage time to decide, FSA guide to Mortgages, FSA guide to Financial Advice. They are available free from the FSA leaflet line on 0845 456 1555.

5. The factsheet will be available in 6,000 of the busiest GP surgeries and will potentially reach over 60% of UK GPs and their patients.

6. The FSA will also be supporting its factsheet and poster campaign with advertising in the national tabloid newspapers.

7. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection of consumers; and fighting financial crime.

8. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.