Endowments – in the 80’s and 90’s these were very popular as these supposedly offered borrowers a lower cost method of paying back the mortgage. Mortgage payments formed two parts, firstly the interest was paid to the lender and instead of paying back some of the capital an endowment policy was purchased (often with very high levels of commission paid to the seller, bank or building society). This gambled on the returns from the endowment being high enough to repay the mortgage, if you were lucky you’d get a large surplus as well as your mortgage repaid. In times of good returns from the stock markets etc this was all well and good…. But when the stock markets didn’t perform the endowments policies did not payout enough and this is where the problems started.
Often these policies were described as a sure thing i.e. the only gamble was how much of a surplus you would get. In reality thousands of these policies are now way short of repaying the mortgage. If you have one of these policies and were not told of the risks you may have been mis-sold and could be entitled to compensation. The Financial Services Authority (FSA) is a good source of information for complaints.

The upshot of this is that endowments policies are rarely offered now.