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Rise in size of endowment shortfalls |
According to the Financial Ombudsman Service, the extent of shortfalls in homeowners' endowment policies is increasing.
The average difference is now £7,057 between the maturity value of a property and the mortgage it needs to repay, up from £5,800 six months ago.
London and the South are reporting the highest shortfalls, echoing the bigger home loans people in these areas have. Homeowners in these regions potentially may have to find an extra £7,871 and £7,292 respectively.
Simultaneously, 13% of people in London and 14% of people in the South reported their shortfall was more than £15,000.
It is estimated that people aged between 40 and 50 were also on course to witness a large gap between the maturity value of the policy and the mortgage it was taken out to pay off, with their shortfalls averaging £8,114.
Aug 14, 2005
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Lloyds TSB plc has allocated a further £110 million to compensate endowment policyholders. This is in addition to the £250 million which was set aside to pay compensation in 2003.
Lloyds TSB plc to impose a time bar on endowment policyholders that were mis-sold their policies in order to prevent them from making a claim
Reported in the Daily Telegraph December 2004
Mortgage endowment policyholders are collectively going to face a shortfall estimated at £ 40 billion
The average amount of compensation where a policy has been mis-sold is estimated to be £3,000
Source ABI (The Association of British Insurers) 2006
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