If you think you were missold an endowment policy, you must complain quickly or risk losing the right to claim compensation, says Naomi Caine.
It's bad enough to be missold an endowment, but it's even worse to lose the right to claim compensation. However, millions of consumers will soon fall foul of controversial time bars', which put a time limit on how long you have to claim compensation. Patrick Collinson in The Guardian rightly exposed the decision by Nationwide building society to time-bar endowment claims from 8 May. And now Prudential has followed Nationwide's lead, affecting not only its own customers but also endowments sold under the Scottish Amicable brand. The time bars mean that you have only three years to complain after receiving warning of a shortfall. As the first warning letters were issued between 2000 and 2003, insurers are now routinely rejecting complaints.
By the end of the year, three-quarters of endowment customers will have lost the right to claim compensation because of the controversial time-bar rules. Not only is the insurance industry guilty of misselling, but it also wants to wriggle out of paying any compensation.
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The best advice is to act fast. If you think your endowment was missold, you should complain first to the firm. If you are not happy with its response, you can take your case to the Financial Ombudsman Service, who can overturn an insurer's rejection of a time-barred complaint. Lodging a complaint is free, but the jargon can be confusing. So I recommend the Which? website (www.which.co.uk), which has lots of useful tips and even a template letter.
Protect your final-salary pension
Could a cash payment tempt you out of your final-salary pension? It's hard to imagine that anyone would give up a guaranteed retirement income for the sake of a few extra quid, but it's becoming more common.
Growing numbers of employers are offering their staff enhanced transfer values or cash payments to forsake their final-salary pension as a cost-effective way to tackle spiralling scheme deficits, writes Robert Budden in FT Money.
I would think very carefully about this one. I know there's a risk that your final-salary scheme could go bust. But there's probably a bigger risk that your new pension will never match your old scheme. You would need an investment return of about 10% a year, according to one adviser. And how likely is that, especially after charges?
Watch out for subsidence
Insurers are expecting a big rise in subsidence claims as we head for the worst drought in 100 years. So Teresa Hunter's advice in The Sunday Telegraph to check your cover is timely. Most insurers exclude outbuildings.
If you want to buy a house that has suffered subsidence in the past, you need to check whether you can get cover at an affordable rate before you sign the contract.
Also ask whether your insurer has signed the "tree root agreement". If not, you might be liable if the trees in your garden cause subsidence in your neighbour's property.
Naomi Caine is former Money Editor of the Sunday Times
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