Another blow for Standard Life policies
Saturday 09 October 2004
More than 500,000 Standard Life endowment policyholders are to be left with a shortfall on their mortgage, it emerged this week, after the Scottish life insurer announced it was to scrap its mortgage promise, which it introduced four years ago.
The mortgage promise was first launched in 2000, in a bid to provide security for mortgage endowment customers who were concerned that their policy may deliver a shortfall. However, after much worse performance in the equity markets over the following years, the promise has ended up costing Standard Life £100m a year.
In its latest cost-cutting initiative, the promise will be scrapped from the end of next year. However, Standard Life says policyholders who were part of the scheme will be compensated between 40 and 60 per cent of any shortfall on their mortgage.
Whilst many of those who are set to suffer a shortfall are likely to qualify for compensation for the mis-sale of their endowment, only a small percentage of endowment policyholders have made complaints. Standard Life also said all complaints made after May 2006 will be dismissed due to the imposition of a time-barring rule.
A third blow for policyholders this week, was the news that Standard Life is to sever the link between its company profits and the bonus pay-outs to its with-profits policyholders. In future, all pay-outs will be linked to the underlying investments. The group warned that bonuses are set to continue to fall.
Standard Life is undergoing the biggest change in its 175-year history, as its chief executive, Sandy Crombie, leads the group towards demutualisation and a possible flotation.
Commenting on Standard Life's announcements, Clive Scott-Hopkins of Towry Law, the independent financial advisers, said: "These are bold and sensible moves. Although endowment mortgage policy holders will see these discretionary payments gradually phased out they can look forward to a likely windfall, assuming members vote for demutualisation in 2006, which can help to offset anticipated shortfalls.
"However, there is a likelihood that maturity values will continue to decline on longer-term endowments as they are still delivering better results than the insurer's equivalent managed fund, and this degree of subsidy can last for so long before, again, reality sets in."
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
- 1 Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
- 2 Christians: The world's most persecuted people
- 3 The secret report that helps Israel hide facts
- 4 Richard Dawkins says 'date rape is bad, stranger rape is worse' on Twitter
- 5 Danish TV reporter is all business up top, all party down below
The secret report that helps Israel hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
- < Previous
- Next >
iJobs Money & Business
£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...
£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...
£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...
£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...
Day In a Page
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000