The endowment straightjacket

By THIS IS MONEY
Updated:

 

I have been mis-sold an endowment policy and have written to complain the company Royal Bank of Scotland have written back with an offer of compensation.

However, this is subject to us selling our endowment policy to them and using all the proceeds to reduce our mortgage with them and convert to a capital and interest mortgage.

We would be faced with an extra £200 per month which we cannot afford. We would like to take our business to another lender but we are fixed in until 2008 and face a penalty. Is is possible for us to take the compensation without cashing in the endowment policy until 2008 enabling us to switch to a new lender with a monthly repayment figure we can afford? LW, Mirfield

Marianne Fitzjohn, director of Endowment Justice, says: You are perfectly entitled to request a revised offer on the basis of the policy staying inforce and make alternative arrangements at some point in the future.

Once an offer is accepted it is in full and final settlement of the complaint and they will not be able to claim again in the future so it is important to take action to address the shortfall, albeit in the future (in your case 2008).

Remember that you are entitled to be reimbursed for the cost of financial advice and administration costs if you do convert to a repayment mortgage now.

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