Endowments

An endowment policy is an investment product you can buy from a life assurance firm. It’s a regular savings plan, which will pay out a lump sum at the end of the agreed term, on early surrender or on death.
 
If you think you were mis-sold your endowment policy, you may be able to claim compensation with FSCS. You must be able to show that the advice you were given resulted in you buying a product that was unsuitable for you, or you were not appropriately advised of the risks, and that you lost money as a result. We can pay compensation only for financial loss.
 
To be eligible to claim with us, the firm you’re claiming against must have failed and your policy must have been sold after 28 August 1988. Unfortunately, we can’t help if your policy was sold before this date as there wasn’t an investor compensation scheme in the UK before then.
 
Examples of when you may be able to claim compensation for your endowment policy include:
 
  • Your adviser did not properly explain that because the return from investments such as endowment policies is linked to the stock market, there was a risk that your policy could leave you with a shortfall to repay your mortgage loan.
  • Your endowment is due to pay out (or ‘mature’) after your retirement age, and it was clear at the time the advice was given that you would not be able to carry on paying premiums after you retired.
  • Your endowment is not due to mature until after your mortgage loan has finished, and this was not made clear to you at the time of the advice.
  • You already had an endowment and were advised to surrender it and take out a new one.
 
There are time limits for claiming compensation for mis-sold endowments. You either have:
 
  • Six years from the date your policy was sold or, if this gives you more time;
  • Three years from the date you realised (or should reasonably have realised) that you have cause for complaint.
 

Endowment compensation limits

 

£50,000 per person per firm.
100% of the first £30,000 and 90% of the next £20,000 up to £48,000 per person per firm.
The above dates relate to when the firm failed, not when you received your advice.

How long will the endowment claim process take?

6 months

FSCS aims to make a decision on your claim within 6 months of receiving your completed application and required evidence. Complex claims may take longer.