My claim for compensation in respect of my first endowment policy, sold before April 1988, is being handled by another claims company.

They wrote to me today, noting the following:

"...we believe that you may have received inappropriate advice in being recommended your endowment policy....

..We propose to forward the relevant, specific areas of complaint to your endowment provider for consideration in accordance with the regulatory guidelines as laid down by the Financial Services Authority (FSA)..."

So the game is afoot!

I have lodged my details with another claims company, in respect of my second endowment policy.

I received a letter from the claims handlers, who are pursuing my claim for compensation in respect of the mis-selling of my second endowment mortgage.

The company that sold me the policy will not compensate me, and the claims handlers state that they have approached all possible sources to "facilitate" my case.

They state that they are unable to act on my behalf wrt the second policy.

I shall look around and see if there are any other claims organisations who feel they could achieve more.

I read an interesting article in Saturday's Times about endowments, and those purchased before April 1988.

I was pleased to see that they agree with my analogy, which compares the purchase of an endowment to the purchase of a malfunctioning TV.

I have been banging on about that particular point since the inception of this web diary back in Sept 2002 (well over a year ago), both on the diary and to the FSA et al; yet the relevant authorities refuse to take this point on board (how surprising!).

Maybe now it has been made in national newspaper, others will take this point up and push it hard.

A few statistics, provided by the FSA to the Treasury Select Committee investigating the Endowment Mortgage mis-selling scandal of the eighties, to depress you:

• There are estimated to be 5.3 million people holding endowment polices, who face a shortfall



• The average shortfall is expected to be £5500



• The total value of the shortfall is expected to be £30BN

I fear that these are very optimistic estimates, to say the least; and suspect that the average shortfall will be in the region of between £10K-£20K.

On the this basis, we are likely to see a total shortfall of around £100BN.

I understand from reports that Legal & General will review the sale of with-profits saving products.

By all accounts Standard Life is also thinking along the same lines.

L&G CEO David Prosser told the Treasury Select Committee:

"...We have some doubts about whether there will be sufficient capital being created for the future to maintain these with-profits products.....We would certainly review whether to keep offering with-profits products..."

These products are mainly invested in equities.

Their reputation and usefulness have been diminshed expensive guarantees and falling bonus rates.

Sandy Crombie, CEO of Standard Life told the Committee:

"...The trend is against with-profits.."

The party is over!

Someone will now have to clear up the mess left behind by these underperforming products; which were used to provide the capital to repay mortgages taken out in the eighties.

The directors of some of Britain's largest life assurance companies were given quite a grilling yesterday by the Treasury Select Committee.

These life assurance companies, are those well respected institutions who sold us our underperforming endowment policies in the 1980's.

The Times printed a few stats relating to the pay rises of the top four bosses, and the performance of a 25 year endowment policy taken out by a male aged 29 contributing £50 per month.

Richard Harvey (Aviva) paid £1M 2002, pay rise since 1999 45%- endowment payout 2002 £88K, 1999 £110K (fall 25%)

David Prosser (L&G) paid £1.3M 2002, pay rise since 1999 50%- endowment payout 2002 £74K, 1999 £101K (fall 27%)

Sandy Crombie (Standard Life) paid £0.7M 2002, pay rise since 1999 70%- endowment payout 2002 £90K, 1999 £107K (fall 17%)

Jonathan Bloomer (Prudential) paid £1M 2002, pay rise since 1999 52%- endowment payout 2002 £78K, 1999 £106K (fall 26%)

Nice work guys!

Thanks to The Times for providing the figures.

I see that Jonathan Bloomer (CEO of Prudential) has been up in front of the Treasury Select Committee, which is investigating the endowment mortgage mis-selling scandal.

He told them the following, "I very much regret any mis-selling that we have done".

That's alright then!

Other heads of the companies that sold these endowment policies will be grilled by the Committee today.

The FSA estimates that around 3.5 million people are facing a shortfall on their endowment policies.

By anyone's reckoning, that is a lot of angry people.

I received a letter from the company that is handling my claims for endowment mis-selling, in respect of my endowment policy taken out in 1987.

They state that they beleive that I "have a good case for receiving endowment mortgage compensation".

If this is true, then it will be a watershed for people who are facing shortfalls on policies taken out pre April 1988.

The endowment companies have been hiding behind the legislation that only came into effect at that date; stating that pre April 1988, the rules for mis-selling do not apply.

The letter included a form for me to complete (I am an expert at these!), which enables me to provide them with more details about the policy.

First the good news; the FTSE is on the rise, and has hit an 18 month high.

Now the bad news; the companies that manage endowment schemes have reduced the proportion of their assets held in equities, favouring less risky (and less profitable) bonds and gilts instead.

This means that now that the bonus announcement season is upon us once again, don't get your hopes up; there will be a plethora of bonus cuts again this year.