Standard Life improves mortgage endowment payouts

by Gill Montia

Story link: Standard Life improves mortgage endowment payouts

Standard Life has reported that at least 45% of its 63,000 mortgage endowment policyholders, whose policies mature during 2008, will not be facing a shortfall.

In fact, the percentage could be higher because the company’s current projections do not take account of top-up payments under its “mortgage endowment promise”.

The figure is a huge improvement on 2007, when over 80% of maturing mortgage endowment policies fell short of their targets.

The maturity value of a 25-year mortgage endowment taken out by a male aged 29 and saving £50 a month is £37,763 compared with £36,950 on a similar policy that matured a year ago.

Turning to Standard Life pension policies, payouts show no improvement on 2007, with a 20-year, £200-a-month pension policy producing a pension pot of £92,735 for a man of 65, compared with £92,820 a year ago.

In July of last year, Standard Life began using some of the money in its inherited estate to improve certain with-profits payouts.

Jim Black, Standard Life’s actuarial director comments: “This demonstrates the benefits of being invested in with-profits which, through the smoothing of investment returns, can help to shield customers from the worst impact of short-term market upheaval.”

Finally, Standard Life has removed exit penalties for some of its two million with-profits customers.