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How compensation is calculated

If you have a valid complaint, you may be due compensation. We have published detailed guidance that firms should use when handling mortgage endowment complaints.

Compensation is usually worked out by looking at your position with an endowment mortgage and comparing it with what your position would be if you had a repayment mortgage. (It will consider the amount of capital you would have repaid on a repayment mortgage, compared with the actual surrender value on your endowment policy plus any difference in monthly outgoings. This is to show if you are now financially worse off because of bad advice.)

To put it another way, working out compensation involves comparing:

Diagram of how compensation is calculated

In some cases other factors need to be considered in the overall calculation – see our Endowment mortgage complaints printed guide. You can download it from Publications, where you can also order it online.

If you get compensation from making a complaint about the sale of your endowment policy, you should consider using it to reduce the amount you owe on your mortgage.