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NU says policyholders unconcerned by &#39crisis&#39

Norwich Union says mortgage endowment problems have been exaggerated.

It says it has conducted detailed research and has found that no policyholders thought they faced real financial difficulties as a consequence of endowment shortfalls. NU claims policyholders are more disappointed at the possible loss of a tax-free lump sum on maturity.

NU says awareness of the “endowment crisis” is high, with 96 per cent having heard of it. But only 15 per cent were very concerned while 52 per cent were unconcerned, rising to 59 per cent when house price inflation was taken into account. Thirty-six per cent expected a shortfall and estimated it to be £7,661. Seventy per cent of these had taken steps to mitigate shortfalls.

Mori questioned 201 policyholders from various providers in December 2002.

Norwich Union chief actuary Mike Urmston says: “The vast majority of people are aware of what is happening with mortgage endowments and are satisfied with the communications they are getting. There are some concerns but the majority facing a shortfall say the situation will lead to disappointment rather than financial hardship.”

The Consumers&#39 Association senior policy adviser Mick McAteer says: “You would have to live on Mars not to be aware of the endowments crisis. You have to take with a pinch of salt research done by providers. Awareness does not mean that the problem is being properly addressed or that providers are willing to provide redress.”


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