Although numerous endowment mortgage companies have announced that they would not be able meet return expectations, there are a few endowment mortgages that are still performing quite well inside the UK. The main issue for the non-performing endowment mortgages appears to be whether or not companies are correctly reporting returns. However, for consumers working with legitimate companies, the returns have been quite good.”Because of our financial strength policyholders benefited because we were not constrained by any solvency requirements and were able to retain our investment freedom,” said David Belsham, the chief actuary at Prudential UK. A spokeswoman for Legal & General says: “We would expect all of our maturing policies this year to hit their targets and the surplus to reach between 30 to 40 per cent. Last year, on average, our policies were achieving that level.”Gary Rowe, an actuary at Norwich Union Life, says: “In 2008 we expect 72,000 policies to mature. Of those, 31,000 or about 43 per cent will be on target. The average shortfall for those who fail to meet their target will be about £1,350. That’s before we announce £2bn special bonuses to our Commercial Union and General Accident policies, so the shortfalls will be reduced further.”
Related reading: Endowment Mortgage
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