Money: Readers' Lives - What if you're not so well endowed after all?

Mortgage policies ... transferring shares ... share certificates as collectors' items ... your queries answered

IN 1990 I took out an endowment policy to back a pounds 50,000 mortgage. I had always rented before and was green as far as mortgages go. The attraction of the endowment option was two-fold: my mortgage would be paid off in 25 years' time and I would not have to start again every time I moved. I could also expect to receive a payout over and above the pounds 50,000 needed to cover the mortgage. But having had the unexpected shock of negative equity (now remedied by rising prices) I'm being asked to increase my endowment premiums. Do I have an option? I'm beginning to wonder whether I would have been better off by continuing to rent.

UJ, London

You are part of what is threatening to become a major problem. Millions of homeowners were sold endowment policies in the 1980s but the first hint of possible difficulties did not come until about 1994. At that time, a few insurance firms asked policyholders to increase premiums. They reassured customers that only a handful of policyholders - mainly those who bought in the early 1990s - were affected. Unfortunately the number seems to be growing every year.

The problem with endowment premiums is that they were set using assumptions about investment growth that now look unduly optimistic. Inflation in the 1990s has been lower than in the 1970s and 1980s. It is expected to be even lower over the coming years. Lower inflation leads to lower investment returns.

Most insurance companies continue to reassure policyholders that their endowments will pay off the mortgages. But if you want to be certain that your mortgage will be paid off by the date originally intended, you should convert it to a repayment mortgage. You will have to make increased payments to your mortgage lender. If possible, keep paying into your endowment policy in order to get the full value of premiums already paid in. This would mean looking at the policy as a straightforward savings plan.

There are other possibilities. You could maintain your interest-only mortgage and pay some money into an alternative savings plan - such as a PEP - rather than increase your endowment premiums. Or you could save up the extra premium you are being asked to pay, and perhaps once a year make a partial capital repayment. Discuss this with your lender. The frequency of capital repayments would depend on how soon they reduce the interest you are charged.

Two other points. An endowment policy may let you pay off your loan after 25 years but this is not quite the advantage it seems. You are not obliged to start a new 25-year repayment mortgage term every time you move home. You can choose a shorter term. And if you (and countless other homeowners) had taken out capital repayment mortgages instead of interest- only mortgages backed by endowment policies, you would have been paying back some capital right from the start. This would have reduced your negative equity.

We have an employee share saving scheme at work, through which I recently bought some shares in the company I work for. I'm now in the process of filling in my tax return and realise that, as a 40 per cent taxpayer, I'll have to pay extra tax on the share dividends. My wife is a full-time house worker and mother and does not have sufficient income to make her a taxpayer. Can I give her the shares to reduce our joint tax bill?

MM, Lancashire

You can indeed transfer these shares to your wife. The fact that they were acquired through a scheme at work is irrelevant. But you have to be prepared to transfer ownership without any conditions: your wife must become the unambiguous owner of the shares. You should make sure she has the paperwork relating to this purchase. When she eventually sells the shares, her cost of acquiring the shares will be whatever you paid for them. You can get details of how to put shares in your wife's name from the company registrar.

As a non-taxpayer, your wife won't have to pay higher-rate income tax on the share dividends. In addition, she'll be able to reclaim tax credits accompanying the dividends if they are paid before 6 April 1999. These tax credits, currently worth 20 per cent of the gross dividends (that is, the actual dividend plus the tax credit) are reckoned to meet the tax liability for basic-rate taxpayers. But from 6 April 1999 non-taxpayers will no longer be able to reclaim this tax (unless the government accepts amendments to the finance bill currently going through parliament).

My uncle died last year and I am his one and only heir. I've been going through his papers and have come across several lots of share certificates dating back to the 1890s. I suspect that the companies no longer exist, but was wondering whether the certificates themselves have a collectors' value?

VM, Sussex

Possibly, but don't raise your hopes too much. Scripophily is the name given to the collection of old share and bond certificates. Elaborately adorned share certificates in 19th-century gold mining companies are more likely to have a value than the computer-generated slips of paper of recent years. Certain themes, such as cars, trains and aircraft, interest collectors and so increase the value of certificates from companies that operated in these areas. One dealer specialising in scripophily is Herzog, Hollender, Phillips & Co. You can contact them on 0171-433 3577.

It is remotely possible that the certificates are for shares in companies that have been taken over by firms still quoted on the stock market. They may have some stock market value. But it's likely that your uncle received replacement share certificates at the time of any takeover and subsequently sold the shares.

q Write to the personal finance editor, 'Independent on Sunday', 1 Canada Square, Canary Wharf, London E14 5DL and include a phone number, or fax 0171-293 2096.

Do not enclose SAEs or any documents that you wish to have returned. We cannot give personal replies or guarantee to answer letters. We accept no legal responsibility for advice given.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
This year's models: buyers have plenty of options as they try to get the money together to drive away from the dealer in a new car

Car finance options: Best way to buy a 65 plate

Sales could find another gear as the '65' registration hits the forecourts next week. Rob Griffin looks at the finance options
In too deep? Travel cover is among the benefits offered by packaged bank accounts

Claims firms blamed as complaints soar over packaged bank accounts

Many customers complained they were switched to the accounts without their knowledge

Finger on the interest rate trigger: the Bank of England

The best deals on personal loans: Peer-to-peer providers are more competitive for smaller sums

Meanwhile, high-street lenders continue to cherry-pick and be more competitive on larger loans

China stock collapse: Five things you need to know about 'Black Monday'

The market plummeted this week, losing all the gains made for the year

Which? warns sports fans about Rugby World Cup ticket scams

GetSporting.com offers deals that may be too good to be true

Could it be the time to focus on Japan? Some believe the country has no choice but to boost consumption and the economy will get back on track

Investors told to travel the world in the search for higher returns

Assets have risen in value across the board and volatility isn't going away. Rob Griffin asks where we should put our cash
As rising house prices push up demand for renting, so tenants are having to dig deeper than ever

Starter home initiative is urgently needed as rents go through the roof

Rents in England and Wales rose by 1.9 per cent in July to an average of £804

Peer-to-peer lending rates put Nisas to shame

The returns from P2P providers look more attractive than ever

Questions of Cash: Log-in problems turned eDreams booking into one-way ticket to nowhere

The company failed to provide our reader's flight ticket - or a refund

Hot property: business has been booming in estate agents this month, even though it’s the height of the summer holiday season

Heat rises for mortgage deals as UK homeowners sense a rate hike coming

The housing market should go quiet in August but instead people have been acting like cheap loans won't last. Do we really have to rush, asks Simon Read
Phones have now overtaken personal computers as the most used way of accessing the internet

Who you gonna call? The Complaints Busters

Unhappy customers have been given their own Ombudsman to help fight for them.

Undergraduates are being tempted with freebies by banks

Students should give freebies a wide berth and focus instead on cheap borrowing

An interest-free loan far outweighs the value of any of the bank's incentives

The Spanish carrier changed a reader's flight from Madrid – to a time before she was due to land

Questions of Cash: 'A connecting Vueling flight was cancelled and all my travel costs were left hanging in the air'

Our reader encountered problems when flying from London to Ibiza in May to take part in a charity ride

Complacency about rising rates could prove to be costly

Interest rates stay at 0.5% for now - but don't wait to get a better deal on your savings and mortgage

The years of ultra-low rates are coming to an end

The elderly are being targeted by fraudsters with postal scams such as fake prize draws

Fraudsters are bombarding older people with dangerous pension scams: here we reveal the warning signs

Many people are being repeatedly targeted by crooked schemes

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

    Recruitment Genius: Mortgage Administrator

    £20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...

    Day In a Page

    Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

    ‘Can we really just turn away?’

    Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
    Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

    Nine of Syria and Iraq's 10 world heritage sites are in danger...

    ... and not just because of Isis vandalism
    Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

    Girl on a Plane

    An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
    Why Frederick Forsyth's spying days could spell disaster for today's journalists

    Why Frederick Forsyth's spying days could spell disaster for today's journalists

    The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
    Markus Persson: If being that rich is so bad, why not just give it all away?

    That's a bit rich

    The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
    Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

    Coleman on course to end half a century of hurt for Wales

    Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
    Rugby World Cup 2015: The tournament's forgotten XV

    Forgotten XV of the rugby World Cup

    Now the squads are out, Chris Hewett picks a side of stars who missed the cut
    A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

    Britain's Atlantis

    Scientific study beneath North Sea could revolutionise how we see the past
    The Queen has 'done and said nothing that anybody will remember,' says Starkey

    The Queen has 'done and said nothing that anybody will remember'

    David Starkey's assessment
    Oliver Sacks said his life has been 'an enormous privilege and adventure'

    'An enormous privilege and adventure'

    Oliver Sacks writing about his life
    'Gibraltar is British, and it is going to stay British forever'

    'Gibraltar is British, and it is going to stay British forever'

    The Rock's Chief Minister hits back at Spanish government's 'lies'
    Britain is still addicted to 'dirty coal'

    Britain still addicted to 'dirty' coal

    Biggest energy suppliers are more dependent on fossil fuel than a decade ago
    Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

    Orthorexia nervosa

    How becoming obsessed with healthy eating can lead to malnutrition
    Lady Chatterley is not obscene, says TV director

    Lady Chatterley’s Lover

    Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
    Farmers in tropical forests are training ants to kill off bigger pests

    Set a pest to catch a pest

    Farmers in tropical forests are training ants to kill off bigger pests