More than 10 million mortgage endowment policies are thought to have been sold in the UK during the '80s and '90s. Originally thought to be a good investment for homeowners, endowment policies offered a way to pay off the mortgage and potentially have surplus cash left over.
However, the reality has told a different story. New research from Fairinvestment.co.uk has shown that 86 per cent of participants have received warnings that their endowment policy will not be enough to pay off the mortgage.
Of those expecting a shortfall, 41 per cent are expecting a deficit of as much as 25 per cent meaning they will have to find thousands of pounds elsewhere. A worrying 23 per cent of people questioned confessed that they are expecting to cover a huge 50 per cent of their mortgage because the endowment policy is just not enough.
When the gap is 50 per cent or more people are in real financial danger. In 2003 the Government accurately estimated that eight in 10 endowment policies sold were unlikely to pay off the mortgages they were taken out for. Since then it is estimated that 70 per cent of those facing endowment shortfall have remortgaged, sought financial advice or applied for compensation. But, the FSA believe there are still as many as 700,000 people who have still done nothing about their endowment shortfall.
The Fairinvestment.co.uk poll revealed that out of all participants, just 6 per cent are expecting a surplus from their endowment policy. A further 6 per cent are lucky enough to be on track and expect to pay off their mortgage with the endowment.
Commenting on the results, chartered financial planner at Fairinvestment.co.uk, Sharon Bratley said: "Our statistics just go to show what a let down endowment policies were and still are. Those who have not yet done anything and are expecting a shortfall on their policy should act now. There are a number of options open to investors, one of these being to sell the policy. For those sitting on their endowment it might not be too late to sell; there are still plenty of investors out there who see endowments as a desirable asset."
Mrs Bratley added, "Alternatively, if you feel the risks associated with your endowment policy were not explained sufficiently at the time, you could have grounds for complaint and be eligible to file for compensation."
Fairinvestment.co.uk offers both selling endowment and endowment compliant services."
About Fair Investment
Fairinvestment.co.uk, is an independent online finance portal, providing comparison tools, news, reviews and information on a wide range of financial products and services, including insurance, credit cards, mortgages, loans, savings and investments.
Fair Investment Company sees 400,000 unique users per month, sells over £5 billion worth of mortgage enquiries and is a Hitwise 100 Banks and Financial Institutions site.
For further information, contact:
Fair Investment Company
20 The Mall
Tel: 0117 9335507
Fax: 0117 9335509
This press release was distributed by ResponseSource Press Release Wire on behalf of pr-sending-enterprises in the following categories: Personal Finance, for more information visit https://pressreleasewire.responsesource.com/about.