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Exodus from endowments

The number of endowment policies in force has fallen by nearly three million in the last three years, according to a report by the ABI.

Figures show the number of mortgage endowment policies fell to eight million by December last year from 11 million in 2001.

Latest data from the FSA indicates that the average projected endowment shortfall is around 5,500, with the total shortfall in the UK estimated at 20bn.

The research shows that each policyholder has an average of 1.5 mortgage endowment policies, reflecting the fact that many people took out additional policies when moving to a new property.

Anand Associates managing director Bhupinder Anand says: “Negative publicity has caused a panic which has resulted in so many people surrendering policies. People have been cancelling based on inadequate information.”Independent View, p37

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