Following the most recent endowment policy projections issued by Standard Life, it is thought that almost 90% have been classed as 'red'. They have said that they expect the number of complaints received to rise. If you receive a 'red' projection letter, this means that your endowment is almost certainly not going to grow to the amount it is supposed to. The average shortfall projection given by Standard Life is 8%.
According to the press office at Standard Life, 300,000 mortgage holders were sold endowments directly by Standard Life. 10% of these people have complained and 90% of cases have been upheld.
Our View
Standard Life quite rightly held its hands up in January when they admitted not properly alerting policyholders to the risk of endowment shortfalls. This round of projection letters will be accompanied by a Financial Services Authority fact sheet and Standard Life's own brochure.
Standard Life hopes that this will give policyholders the information they need to decide what action to take. If you have a mortgage endowment and have still not checked whether or not it is on track to repay your mortgage, where have you been for the last few years?
Seriously though, your endowment might not provide enough to repay your mortgage and the earlier you look into it, the more options and chance of sorting it out you will have.
For tips and guidance, download our free fact sheet on endowment mortgages.