Survey finds 86 percent expect shortfall
A survey of 195 endowment mortgage holders found that 86 percent of them had received warnings that their endowment policies will not yield enough to pay off their mortgage.
The survey, carried out by The Fair Investment Company, also revealed further gloomy expectations of endowment mortgage holders. It found that 41 percent of those expecting a shortfall were anticipating a 25 percent deficit while an unfortunate 23 percent of those surveyed expected to pay for half of their mortgage due to a shortfall. This is a serious blow for those led to believe their endowment would be a safe and reliable investment to pay off their mortgage.
Unsurprisingly there were few positive expectations amongst the endowment holders surveyed with only 6 percent expecting a surplus from their endowment. Only a further 6 percent felt their endowment policy would pay off their mortgage, a terrible figure when one considers this was the main selling point of these products.
Those holding policies expected to experience a shortfall can still to sell their endowment as demand from overseas investors in the TEP market is predicted to continue. The APMM believes that policyholders can expect to obtain 10 to 15 per cent above the surrender value if they sell their endowment, but caution that professional financial advice should be obtained before making a decision.
