In January 2006, the Financial Services Authority (FSA) fined Guardian Assurance £750,000 for serious systemic flaws in its mortgage endowment complaints handling procedures and for not drawing the problems to the attention of the regulator.
If you have a Guardian endowment policy then do check your last projection letter to see how well or poorly the policy is performing. The letter will inform you of how far short you are currently of the actual target amount. It will also tell you what options you have.
Over the last few years, investments generally have performed badly due to a variety of factors. Many people have become tired of relying on risk related products and have opted for safer options especially when it comes to mortgages.
The options available are:
- Keep the endowment running and simply increase the premiums in the hope that the markets will pick up and that you will get a better return in the future.
- Surrender the endowment and use the proceeds as you wish. Some people will put use the money to reduce their mortgage and then switch to a repayment. Others who do not have a mortgage will just open a better and safer savings account with the proceeds.
- For those with mortgages, you could keep the endowment policy running as a savings plan but switch to a capital repayment mortgage anyway. This is usually expensive and it often is a question as to whether one can afford to keep up capital repayments and also pay for an endowment policy at the same time.
Copyright © 2007. Endowment Policies.