Half a million endowment mortgage policyholders could face top-up payments if returns on Standard Life's with-profits fund fall below six per cent per annum, the company has announced.
Despite the announcement Standard says that none of its endowment policies have ever run their course and failed to match their forecast maturity value.
Six per cent is the mid-range level set by the FSA, under which extra contributions would become necessary.
A sharp reduction in rates would have to occur before this situation would become a reality. Standard Life is currently delivering average annual rates of 13.5 per cent on its 25-year endowments maturing this year.
Other companies that have admitted that the risk of top-up payments exist include CGU Life which has 400,000 policies, Lloyds TSB with 240,000, Prudential with 100,000, Royal London with 12,000 and Royal and Sun Alliance with 120,000 policies.