A recent research paper published by the financial services industry watchdog, the Financial Services Authority has highlighted that fewer policies are actually reaching maturity.
The released figures show that 1 in 10 people that purchased an endowment or whole of life policy stopped payments in year 1. After 3 years payments the numbers increase to 1 in 3 cancellations for pensions and 1 in 4 for endowments.
Our View
Whilst many of the policies will have stopped because of financial difficulties, others will simply be the first things to go when a consumer is trying to reduce outgoings. Many consumers do not see the benefits of financial products such as life insurance or pensions but also do not shop around for the best deal.
Our advice is to sit down with an adviser and get your priorities straight. Then, find the policies to suit. Then, compare the costs and the benefits.If consumers feel that the policies they buy will benefit them and they perceive value for money, fewer policies will be cancelled.