The Financial Services Authority has said that most people who are facing a shortfall on their endowment policy linked to their mortgage have taken action to deal with it. Research by the Financial Services Authority covering 2.2 million households, shows 82% of those who still have an endowment-linked mortgage have an average projected shortfall of £7,200, and 69% of those have already taken action to rectify the situation. A further 14% plan to do so in the near future.
The Association of British Insurers believe that the number of endowment policies in force dropped to 7.5 million in 2005, from 11 million in 2001.
Our view
Endowments are not a bad investment if sold for the right reasons. The problem with them in the past was greed by advisers, greed by insurers and greed by the client. All banking on and dreaming of great returns.
We still see people being greedy every day - you only have to look at how many people are buying holiday homes in far off, and sometimes, former war zones, to see that people are still just as greedy trying to make easy money.
It will end in tears for some. Problems with your endowment or thinking of buying a second home? Talk to us first.