The Scandal That Won't Go Away
Despite hoping that the endowment mis-selling scandal will go away, life assurers are now having to face the same financial misery that the 6 million of us who bought these non performing white elephants have been enduring for the last few years.
Evidence of this emerged yesterday, as Nationwide has announced that it has tripled its provisions for compensating endowment mortgage customers; as complaints of mis-selling continue to escalate.
Fortunately for Nationwide, they do have a 21% increase in profits to cushion the effect.
Nationwide has raised its provision from £11M to £34M.
They admit that it is "possible that the value of some investment policies will not be sufficient to fully repay mortgages on maturity".
Don't fear for Nationwide's future, its pre tax profits for year end April 2004 were £426M.