Savings endowments

How we resolve complaints about savings endowment policies

• You were given the wrong advice

  You may have had advice about your policy from an adviser – either an independent financial adviser (IFA) or one employed by the policy provider. If so, we’ll look at what you discussed, particularly about how much risk you wanted to take and whether the policy matched this.

  We'll also consider what you might have done with your money if you hadn’t taken out the savings plan. If we’re satisfied the policy wasn’t as suitable as a general savings plan, we’re likely to uphold the complaint.

• Sales and marketing material was misleading

  An 'execution-only' sale where you buy a plan without receiving advice. If we believe you understood, or should have understood, this is what you were doing, we're unlikely to uphold your complaint.

  You may have bought your plan after getting a mailshot or illustration explaining the sale. If that's the case, we'll want to be sure you could make an informed decision when buying the plan. So, we’ll check whether the information provided was clear, fair and not misleading.

• Your plan wasn’t a suitable investment

  A 'reduction in yield' is the difference between the projected return – that you were given when you bought your plan – and the amount it's worth after costs.

  If your complaint is about this, we'll ask your adviser or insurance company to give us an example from the time when they sold it to you. This should show us the projected return of the plan after life cover costs and other charges.

  If the example shows a smaller – or only slightly bigger – return than what you paid in premiums, we'll look to see if this was made clear to you.

  If it wasn't made clear, we'll argue that you wouldn't have chosen an investment where you'd get less back than you paid in. We'll then decide if you've lost out by investing in the plan.

• You’re unhappy with the charges and deductions

  When you buy a savings endowment policy, you will sign up to pay charges and deductions, for example for life cover. These usually come out of returns, or money made, on the plan and can affect how much you make.

  Life cover

  Life cover – or life assurance – is always included in savings endowment policies. The insurer will take the cost of your life cover from the returns on your investment. This cost varies according to how old you were when the plan started. Charges tend to be higher if you’re older.

  Sometimes, the cost of life cover makes a big difference to your return. But you may not have needed it.

  So, we'll look carefully at what your needs were when you bought the plan and whether it was a suitable investment. Your age alone isn’t enough to suggest a plan was unsuitable. But we’ll look closely at what the financial adviser or insurer told you when you bought the savings endowment.

  If we think you did need life cover, we’ll work what percentage of your premium it was. We may still uphold a complaint even if this percentage is very small.

  It may be the cost of the life assurance is not to blame for the low returns. If so, we’ll look at other charges on your savings endowment and whether they made the plan unsuitable.

  If you pay premiums from home

  When an agent comes to your home to collect your premiums - what's called 'industrial branch sales' - it may cost more than paying premiums from a bank account.

  If this is how you pay your premiums, we'll look at whether you understood this when you took out a plan. This is important, especially if the agent was selling door to door and we find the plan is different to the one sold in an office or branch.

What to expect