Standard Life Endowments fall even shorter
Standard Life announced that 97 percent of its mortgage endowment policies will fail to pay off the mortgages they were supposed to cover.
An example of expected returns sees a £50 per month 25 year Standard Life mortgage endowment maturing now paying out £26,869, a fall of 13.5 percent on the £31,066 an equivalent policy returned a year ago. Despite the bounce in equities last year, there was only a 6.2 percent growth of the fund in which mortgage endowments are held. This was due to the relatively lower holding (32.5 percent) of shares within the fund.
Although mortgage endowment customers may have hoped to see an bonus increases, they may be thankful that bonuses will at least be maintained at current levels.
Standard Life’s Margaret Flaherty said “We are pleased to say that most customers will see a year-on-year increase in the value of their plan. Plan values depend on investment returns on the assets in the with-profits fund” adding “classes of investment such as fixed interest and property delivered lower returns in 2009 than equities”.
