Predicted Shortfall in 80% of Endowments
MPs slam the Endowment industry
12th March 2004
A select committee report has predicted that 80% of endowment policies will fail to pay off the mortgage they were meant to cover. The MPs blame the shortfalls on low interest rates and the stock market slump, compounded by poor advice from 'commission driven' insurers.
Committee Chairman, John McFall, was damning in his assessment of the endowment industry, saying 'Effectively, the mis-selling of endowments only disappeared once much of the industry stopped selling the product at all.'
The report estimated that the average shortfall was £5,500, with shortfalls continuing to rise until 2013. Up to 60% of policies may have been mis-sold, while only 6% of customers have sought compensation.
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