Making a complaint about your endowment

If you have been told that your endowment policy may not cover the outstanding capital at the end of your mortgage, you might be able to make a complaint.

You may be entitled to compensation if you got bad advice from the company that sold you the policy and you have lost out financially as a result.

Was the adviser/company wrong to sell me the endowment?

Companies selling endowment policies have to follow certain rules. If you think you have been treated unfairly, you can make a complaint. You may be able to do this even if you have already sold or cashed in your policy. You should consider this option if:

  • you were advised that your endowment policy was guaranteed to earn enough to pay off your mortgage, and there is now a shortfall
  • you were sold a policy that wasn’t due to mature until after your retirement and your adviser didn’t consider whether you would be able to afford to keep up with payments after you retire
  • you were advised to cash in one endowment policy to take out another
  • you weren’t advised that you were paying for life insurance as part of your endowment, and you didn’t need it
  • your mortgage will end before your endowment policy matures
  • you weren’t advised that your money would be invested in the stock market, which means it isn’t guaranteed to pay off your mortgage
  • you weren’t told that if you decide to cash in or sell your policy early, you will have to pay penalties, and may not get much for the policy
  • you weren’t informed of any other fees and charges involved.

You may also be able to get a small amount of compensation if you have been seriously distressed or inconvenienced by the shortfall. If you think you have a valid complaint, you should take action quickly. If you don’t, you could lose some or all of the compensation you’re entitled to.

Should I complain to the company first?

You should complain first to the company (or adviser) that sold you the policy. This could be the endowment company itself, or an intermediary broker. All companies selling financial products have to have a proper complaints procedure and have to provide information about how to use it.

The Financial Conduct Authority gives step by step information on how to make a complaint and explains when you can take your complaint to the Financial Ombudsman Service. The FCA may also be able to help you if the company that sold you your policy has gone out of business or disappeared.

Can I complain further to the ombudsman?

If you aren’t satisfied with the response you get, you may be able to make a further complaint to the Financial Ombudsman Service (FOS). The FOS provides a free independent service to help solve disputes with financial companies.

Complaint forms are available on the FOS website.

How is compensation paid?

How much compensation you get normally depends on how much better off you would be if you had taken out a repayment mortgage (often with a separate life insurance policy) from the start. If you have lost out financially, you may be entitled to a lump sum payment, which will allow you to switch to a repayment mortgage without losing out on payments you have already made.

We are sorry that we cannot provide this information in Welsh, however if you would like to speak to an adviser in Welsh please contact 0345 075 5005.

This page was last updated on: October 12, 2018

Shelter Cymru acknowledges the support of Shelter in allowing us to adapt their content. The information contained on this site is updated and maintained by Shelter Cymru and only gives general guidance on the law in Wales. It should not be regarded or relied upon as a complete or authoritative statement of the law.