Before it all gets too much for you, NU won't guarantee a final bonus as will no one else,because final bonuses were never guaranteed.

That doesn't mean they won't pay one.I'd be interested to know what the basic sum assured was and how much annual bonus you have accrue so far.

By the way is £25.50 before before tax relief.

WHERE HAS ALL THE MONEY GONE?

1. The starting proposition:
Norwich Union (NU) sold me a low cost endowment policy in 1983 to cover my £14000 mortgage. This was to cost me £25-50p per month for 25 years, and was £2 month more than a repayment mortgage. Excellent value, as it would produce a surplus of £10000 based on NU figures. This was a with profits product, which is wonderful because it smoothes out the variations in share price, etc. Additionally, the annual bonuses based on current performance, are added annually, and cannot be taken away. Even better, the accumulated annual bonuses are increased annually based on present performance.
a. SPOT THE LIES!
b. WHERE HAS THE MONEY GONE?


2. The promises:
My mortgage would be paid off, and I would have a £10000 surplus (in line with payouts in 1983 and going back to 1936 and beyond). An “Additional Bonus” of £6343 would be included in that figure. The amount paid out on a policy like this in 1992 would have been £40000 (source: NU, in Daily Telegraph 15Apr92). The Additional Bonus in 1998 would have been £19306 (source: NU bonus statement). In the same year 5-year returns were 14.9% and 25-year returns were 8.1% after tax!
a. SPOT THE FIDDLE!
b. WHERE HAS ALL THE MONEY GONE?


3. Where are we now?
NU report double figure returns in all years except 2000 = +0.3% and 2001 = -7.1% and 2002 = -4.6%. In 2000, they told me I would not have a shortfall, so I could not be offered a guaranteed return, as some customers were. In 2003, they say I could have a shortfall, but they won’t guarantee me my £14000.
a. SPOT THE FAIR PLAY!
b. WHERE HAS ALL MY MONEY GONE?


4. The future:
NU don’t send us the figures for “Additional Bonus” any more, and they have changed its name to “Final Bonus”, and they say they “may” pay it out if they have any money left over. The good news is that all the safe, long term investment policies and procedures are in place to protect the increasing values of my investments with them. (I wonder if they will lend me my guaranteed bonuses in between doing their annual accounts, because I think I might be able to get a better return than 0.5%. But I haven’t got years of experience, teams of experts, boards (or is it hordes) of directors, bulk-buying, etc).
a. WHO CARES ABOUT MIS-SELLING?
b. WHERE’S THE MONEY GONE?


Brian Entwistle