Endowment mortgages, once a popular choice for homeowners, have seen a significant decline in recent years due to a series of mis-selling scandals². These mortgages were designed as a monthly savings plan, typically invested in shares and property, with the aim of paying off the home loan at the end of the term². However, many policyholders have faced shortfalls in the expected payout of the endowment².
Current State of Endowment Mortgages³
In the wake of these scandals and years of negative press, endowment mortgages have been consigned to history³. As of now, you cannot get an endowment mortgage³.
A Case Study: Cashing in Endowments¹
A recent query to The Guardian asked whether it would be wise to cash in an endowment to pay off an interest-only mortgage¹. The reader had an endowment valued at about £51,000, which was about £10,000 more than their current mortgage¹. They were considering cashing in the endowment, paying off the £41,000 interest-only mortgage, and using the £200 a month they were currently paying for it to overpay on their repayment mortgage¹. The expert response suggested that this could be a good idea, as long as the reader did not need the life insurance provided by the endowment¹.
Conclusion
Endowment mortgages, once a popular choice, have seen a significant decline due to mis-selling scandals and subsequent shortfalls in expected payouts. While they are no longer available, those who still hold endowments are left with decisions on how best to manage them. As always, it's important to seek expert advice when making such decisions.
*Please note that this blog post is a summary of recent news articles and does not constitute financial advice. Always seek professional advice before making financial decisions.*
Source:
(1) Endowment mortgages: Legacy of a scandal - BBC News. https://www.bbc.co.uk/news/business-20858236.
(2) Endowment mortgages – are they still available? | Ideal Home. https://www.idealhome.co.uk/property-advice/endowment-mortgages-304804.
(3) Should I cash in my endowment and pay off my £41,000 interest-only .... https://www.theguardian.com/money/2022/sep/26/should-i-cash-in-my-endowment-and-pay-off-my-41000-interest-only-mortgage.
(4) A guide to endowments | This is Money. https://www.thisismoney.co.uk/money/mortgageshome/article-1583977/Endowments.html.
(5) New mortgage deal falls below 5% in ‘watershed moment’ for UK .... https://www.theguardian.com/money/2023/nov/09/new-mortgage-deal-below-5-percent-watershed-moment-uk-homeowners.
Tax Investigation Insurance
Having a Solar Protect Tax Investigation Insurance policy at your
disposal means that should you be one of the many 1000's of businesses
or individuals that are selected by HMRC each year to look into your tax
affairs your own accountant (your tax return agent) can get on and
defend you robustly.
You have the peace of mind knowing that your accountant's (your tax
return agent) fees will be paid by the insurance without any Excess for
you to find.
Tax Investigation Insurance is an insurance policy that will fully
reimburse your accountants (your tax return agent) fees up to £100,000
if you are subject to enquiry by or dispute with HMRC.
A Solar Protect policy will enable your Accountant (your tax return agent) to:
- Deal with any correspondence from HMRC
- Attend any meeting with HMRC
- Appeal to the First-tier Tribunal or Upper Tribunal
- Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly
- Premiums are Annual Premiums.
- Premiums are inclusive of 12% IPT.
- Premiums and IPT are due in full in advance / at commencement of scheme.
- There is a NIL excess on all policies.
Please click here for details.
No comments:
Post a Comment