Aviva mortgage endowment policies behind target

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Endowment mortgage holders with Aviva (now incorporating Norwich Union) are at risk of not being able to pay off their mortgages when policies mature.

In publishing its 2010 bonus rates, the company has let it be known that nine out of 10 of its mortgage endowment policies are expected to fall short of projections.

In 2009, the insurer’s with-profits fund produced a return of 6%, a disappointing outcome given the 22% rise achieved by the FTSE 100 index.

As a result, a typical A?50-a-month 25-year General Accident endowment policy is paying out A?36,979 on maturity, compared to A?38,776 six months ago and A?42,322 this time last year.

The company has around 700,000 mortgage and savings endowment policyholders, 88% of whom are now in the “red” zone, meaning that returns will not pay off their home loans.

A further 8% are at “amber” with only 4% in the “green” zone.

Aviva’s chief operating officer, David Barral, says: “Although many endowments are not on track to meet the original target amount, we believe most customers have already taken action to cover any shortfall.”

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  1. kay sanger says:

    can anyone help my endowment ended on 28 december they are refusing payment they are insisting for a letter from citibank of no intreset even though the morgage was paid infull to citibank.2003 citibank faxed aletter to aviva on 30 decembeer but aviva declined the fax.this problem as been going on for 2months avia have refused to budge.