When endowment policies became popular in the UK from the late 70s through to the early 90s was there much criticism of them or were they seen as the de facto mortgage set-up?
I have two family members who are having to work past retirement because they are financially illiterate but which they blame on the failure of their endowment policies. When I have asked them why they didn't just get a normal repayment mortgage they imply that endowment policies where pushed very heavily to the point that everyone had one.
Does anyone know if this was the case? Was there any skepticism in the national press about them?
They were actively missold. Take out an endowment and it'll pay off your mortgage with a nice little surplus to treat yourself with. Of course a growth rate of 12% each year is achievable.
You do realise that being the sort of geek who actually, actually, understands the what how and why a mortgage is puts you in a significant minority of the population, right?
>>5702 Disclosure requirements back then weren't what they are now. Many people do not understand financial matters beyond cash deposits, or in some cases have a little knowledge which can be more dangerous than having none at all, so if they go to a bank and are shown the high levels of returns at the time and told that a mortgage will definitely be paid off by the endowment then they will be suckered in.
I can't think of any type of investment vehicle which hasn't been missold. When personal pensions were introduced in the late 80s, which were less restrictive than the previous retirement annuity contracts, there was widespread misselling which led to over a million people being told to take one out instead of joining their employer's final salary scheme.
That being said, people do not help themselves. Research into annuities shows that many people know they will get a much better deal if they shop around but they can't be arsed and accept a poor deal from their existing pension provider. With endowments people have been warned about their shortfalls for years, so it shouldn't be a nasty last minute surprise to anyone.
