Standard Life has announced that because of the bad stock markets, it will be unable to keep its promise to make up shortfalls for mortgage endowment policyholders, despite £393m already set aside. The news is good for those policyholders whose endowments end on or before the 31 December 2005. In this case, the promises will be honoured. For those maturing from the start of 2006 only part of the promise will be kept.
Our View
If Standard Life wrote to you during the year 2000 saying you were eligible for the promise, check your documents now. You will be affected, depending when your policy matures.
Whilst the news from Standard Life may seem harsh and another blow to endowments, it has been expected because of the way stock market investments have been slow to recover. If you have a projected shortfall, you should take action to make sure your mortgage can be paid off at maturity.