Those of you holding endowment mortgages, who think that things are bad now, are going to have to steel yourselves for matters to get worse.
It is reported that about 50% of all endowments maturing this year will fail to pay off mortgage debts; this appears to be the straw in the wind of a very unpleasant storm coming our way.
It seems that, according to experts, matters will get worse.
The current estimate is that there will be a shortfall on mis-sold endowment policies of around £40BN.
However, it is reported that Ned Cazalet an insurance analyst at Cazalet Consulting, is predicting that nearly all all mortgage endowment policies that mature after 2008 will miss their targets.
Here are some stats (source Life Insurance Association):
- Norwich Union expects 45% of its 38000 policies maturing this year will not meet target.
- Standard Life expects 47% of its 57000 policies not to meet target this year.
- Scottish Amicable expects 22% of its 18000 policies maturing this year not to meet target.
- Legal and General expects that 25% of its 25000 policies maturing this year not to meet target.
- Scottish Widows expects 67% of its 9000 policies maturing this year not to meet target.
- Abbey Life expects 98% of its 1500 policies maturing this year not to meet target.
Is it any wonder that people have lost confidence in the financial system in this country?