In 2003 the government estimated that about eight in 10 of the endowment policies then in force were unlikely to pay off the mortgages they were taken out for.

Since then, nearly 70% of those facing an endowment mortgage shortfall have re mortgaged, sought financial advice or applied for endowment compensation.

However, the FSA has said that about 700,000 people have still not done anything to remedy their endowment shortfall problem.

Some of these people may find, due to time barring that it will soon be too late to complain.

The general rule is that people must complain within three years of receiving their first warning "red" letter – The letter is sent to outline a likely shortfall by their policy provider.

Under the FSA rules the policy providers are allowed to ignore complaints made after the time bar comes into play.

What will my endowment statement letter tell me?

The letter will tell you if your endowment is on track to re-pay your mortgage, or whether it is heading for a shortfall. The letters are colour-coded according to the level of potential shortfall.

A Green letters means that the policy is currently on track to re-pay their mortgage. Beware - the value of the endowment must continue to increase by at least 6% a year to avoid falling into arrears.

An Amber letter means that there is significant risk that your endowment will not pay off your mortgage.

A Red letter leans that there is a high risk of you being unable to repay your mortgage at the end of the endowment policies term.

Don’t panic if you have received a red letter - Contact our claims consultants and they will provide an assessment, advice and information about making an compensation claim.

My endowment is heading for shortfall - what should I do?

The FSA has banned insurers from giving advice in the shortfall letters.

You should contact a consultant to get advice on what to do and how to make an endowment compensation claim. When your policy provider sends your “Red” letter, they will include a booklet from the FSA, called: "Your endowment mortgage - time to decide".

If you have not received one of these, talk to one of our consultants for advice and information about your options. Contact us

Should I top up my endowment?

Most experts warn people to steer clear of either increasing their payments on an existing endowment or buying a new one as this could be simply "throwing good money after bad".

How should I go about paying off any shortfall?

If you are prepared to take the risk of investing in the stock market, there is the option of taking out an additional investment, such as a unit or investment trust, within an Individual Savings Account (ISA) to cover any shortfall.

What is the difference between an Interest only and Repayment Mortgage?
 
Interest only mortgage: You pay only mortgage interest each month – With this type of mortgage you rely on an investment to pay off mortgage debt at the end of term

Repayment mortgage: You pay off both interest and mortgage debt each month, so you are certain that, so long as you do not miss any payments, there will not be any  shortfall at the end of the term

Mortgages Quotes - Find out more about choosing a new mortgage

The safest option for an endowment shortfall situation is to convert your mortgage into a part interest only - part-repayment mortgage.

This means that in addition to paying off the mortgage interest each month, you make extra payments to start paying off the underlying mortgage debt.

This reduces the size of the mortgage, and thus should reduce any shortfall caused by the endowment under performing.

What about endowment misselling?

A Treasury Select Committee report suggests as much as 60% of endowment policies may have been mis-sold.

It added that the time limits within which complaints must be lodged had been poorly communicated and required an urgent review.

If you believe that you have a case for claiming compensation, firstly you should act on remedying your mortgage shortfall and then claim your endowment compensation.

What are the grounds for endowment compensation?

The first step is to complete our Endowment compensation claims form – From that information we can tell if you are eligible to claim.

From there, we will submit your endowment compensation claim directly to the policy provider and communicate with them regarding the claim.

If the company cannot or will not resolve your endowment complaint or turns it down for compensation, we will make an approach to the Financial Ombudsman Services (FOS) for an independent review and a final decision.

In June 2005, the FOS reported that it was receiving 1,300 endowment mis-selling claims a week.

Of cases examined by the FOS, it approximates that 40% have been ruled in the claimant's favour and compensation has been awarded.

Basically, you should have grounds to make an endowment complaint if:

• The product was unsuitable at the time it was sold.
• You did not understand what you were buying or the risks involved at the time you bought the policy
• The sale was inappropriate given your financial and personal circumstances at the time, for example, if you were told that your endowment would pay off your mortgage when you retired.

For any claim to be successful, the FOS must determine that you have lost out as a result.

It will calculate compensation based on comparing the performance of your endowment with a repayment mortgage over the same period.

Don’t forget, we offer a No Win – No Fee compensation Service, so unless your complaint is upheld and compensation is paid, you pay us nothing! What you got to loose - claim endowment mortgage compensation!

What do you do next..

To receive your FREE, No Hassle assessment and to see how easy we can make your endowment compensation claim happen, simply:

•Fill in our Online form here

We'll take you through the claims process and providing that you are eligible and if you choose to go ahead, we'll do the rest for you!
Don't delay making your endowment compensation claim, the clock is ticking and we do not want you to miss your chance!