At last an Endowment Settlement - Your thoughts please

Jan 07, 2004 2 Replies
S

Re my post last year. I took advice to cash my under performing Unit Linked Endowment policy. I had paid in £77.25 per month since



30/06/1993 and surrendered in March 2003. I had paid in approx £9000 in that period.

In March 2003 I recieved £6687 and of course, on advice from this group, appealed.



Yesterday I recieved an offer.



They deducted money already paid and have said based on 8% commonly used by Financial Ombudsman (whatever this means) they calculate a shortfall of £5183 net loss and have offered this providing I agree within 30 days time. They have also calculated the loss and interest between now and March 2003 as £341 so will pay £5456 plus interest due to the date the money goes into the bank.



My thoughts are with so many people getting nothing back I am lucky and should cut and run but all the same, with time on my side anyone care to give some opinions themselves ? Appreciated. Also I post here as it is a story that may inspire others to at least complain. A paid the cost of a stamp and five minutes time to do a letter. A good return for five minutes work :-o



Thanks all


Steve


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S

Here is my original post and Ian Dickinson reply (you still around Ian?) Thanks m8 ;-)

From: Ian Dickson ( snipped-for-privacy@iand.demon.co.uk) Subject: Re: More details please advise View this article only Newsgroups: uk.finance Date: 2001-04-08 13:11:02 PST

In article , Steve M writes

From memory the 1993 quote would have been based on the Standard Charges model. This was flattered most companies by not showing the true costs of the contract. It was also legally mandated by the regulators. Indeed when I started publishing real charge data in 1993 the regulators first move was to tell me to stop, then they saw sense.

IMO the Std Charge model was always a crock of odure and should never have seen the light of day.

BUT if the original quote was done by the book then Barclays did nothing wrong. The guy who sold it to you would have been acting in good faith. The new quote will have been done an actual charges basis, and if they were greater than the Std Charge model assumed, there's your discrepency.

You also state that your salesman said it was a "worst case scenario" when of course a "worst case scenario" is 100% loss.

The general view is that as long as you should have understood that there was a risk, no miss-sale occurred.

The best course of action is twofold:-

1) Try for compensation. You can at least make them apply valuable staff time to the matter by asking lots of questions about the maths. Ask for the equations:-) 2) Cover the shortfall. You do not have to increase your endowment premiums to do this. You could , for example, use an ISA.
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T

Seeing that you surrendered at the lowest point in the market, you are lucky. Snatch their hands off.

Obviously you would have been better advised not to surrender, but no doubt panic set in. If you are investing in equity-based funds, then you need to take a long term view, and ignore market ups and downs.

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