Millions stung by endowment policy shortfalls

Millions stung by endowment policy shortfalls



Around 300,000 people who had hoped to pay off their mortgage this year face shortfalls. They are all victims of missselling of 25 year with-profits endowment policies. Almost three million more people will suffer a similar fate in the next few years, according to the Association of British Insurers. At the peak of the 80s housing boom, homebuyers were encouraged to take interest-only mortgages and rely on investment returns from an endowment to repay the loan at the end of the term, usually 25 years. In the 90s, £50 a month policies regularly turned a £15,000 investment into a £100,000 return. Today, they commonly pay out less than £30,000 for the same 25-year investment.