The Endowment Diary

The Endowment Diary


The Endowment Mis-selling Debacle - one of the UK's worst financial scandals

Monday, May 14, 2007

The List of Shame

The List of Shame

Those of us who are unfortunate enough to have bought an endowment policy in the late 1980's and early 1990's may find an analysis produced by Money Management to be of interest.

It shows that, despite rising stock markets, payouts to policy holder continue to fall in most cases.

They compared policies maturing in 2007 with those maturing in 2006, for a male non smoker investing £50 from the outset over 25 years. The variation in returns was staggering. The average growth rate was 8.5%.

The top performer was Reliance Mutual with a return of 13.6%. However, the laggards showing below average returns were as follows (%):

Norwich Union - 8.3
Canada Life - 8.3
CGU - 8.2
General Accident - 8.2
Brittanic Assurance - 8.2
Clerical Medical - 7.9
Legal&General - 7.7
Scottish Widows - 7.3
Scottish Life - 7.2
Standard Mutual - 6.8
Scottish Mutual - 6.8
Friends Provident - 6.7
Equitable Life - 6.5
Eagle Star - 5.7

Well done!

The key question that policy holders should be asking of their endowment company, if they are in one of the under performing ones, is why are your returns worse than others?

Does that not reflect badly on the quality of management, and on the charges levied against the fund?

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