The Endowment Diary

The Endowment Diary


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

Monday, October 08, 2007



Much like the depressing inevitability of the return of an unloved season I received two red warning letters from my endowment provider, Legal & General (L&G), the other day. I am the "proud" owner of two endowment policies taken out with Legal & General, one in 1987 and the other in 1991.

Needless to say, neither are on target to reach their objective (ie to pay off my mortgage).

Legal & General claim, using three projected returns, that the 1987 policy (target £35000) will produce the following results:

-4% shortfall £5400
-6% shortfall £2700
-8% surplus £ 300

The 1991 policy (target £39700) will produce the following shortfalls:

-4% shortfall £10200
-6% shortfall £ 7500
-8% surplus £ 4600

Hardly a "stellar" performance is it?

The question remains though, how is it that some endowment companies have been able to manage their funds sufficiently well so as not to produce a shortfall whilst Legal & General haven't?

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