Millions of homeowners are sitting on a mortgage timebomb that is set to detonate within the next five years as endowment payouts slump again.
Between now and 2015, an estimated two million endowment policies will mature and some companies admit just one in every 100 is on target. The boom years for endowment sales were 1988 to 1993, when up to four in every five homebuyers were sold one.
Tempting figures dangled in front of borrowers suggested that by saving just £50 a month they could reap a return of more than £100,000. But since the start of the century, payouts on a typical 25-year policy have nose-dived to a pitiful £30,000. A 2008 report quoted the average shortfall as £7,200. With values having fallen since then, experts say today’s average shortfall is closer to £10,000.
Source – Daily Mail
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Justin Moy