Norwich Union endowment shortfall scandal

Homebuyers who at first believed that they were protected from the endowment failure scandal are now facing a shortfall after all.

Many people&#39s homes and retirement prospects are in danger as millions of policies have been sold on the basis that they would raise enough cash to pay off the borrower&#39s mortgage.

Two years ago Norwich Union gave its customers reassurance that it would make up the shortfalls but now due to such a bad investment record the money allocated will not now cover the shortfall.

Norwich Union promised that they would make a contribution of £7,900, but that will still leave the customer with a deficit of £9,900.

Norwich Union senior actuary David Riddington said that while the outcome was &#39disappointing&#39 the situation was far worse for customers of other firms who had not made the same &#39peace of mind promise&#39.

Mick McAteer of the Consumers&#39 Association, says: “Norwich Union created an expectation that they would meet a shortfall, buy they now appear to be using the small print to get out of this.”