A hypothetical question for consideration :-

In 1985, 3 Men Peter, Gordon & William all aged 38 formed a small Computer Data Company, it did well and in 1986 they all decided to buy a House each with a £100,000 Interest Only Mortgage.

Peter chose a “Pension Mortgage” to age 70 together with Pension Term Insurance to repay his Mortgage.

Gordon went for a 25 year Low Cost Endowment Mortgage. However, due to a potential “shortfall” on the maturity value of his Endowment Policy, Gordon, looked at “Money made Clear” on the FSA Website and took the advice given on “Ways to make up a Shortfall” and put money into a Stocks and Shares ISA so that together with the maturity value of his Endowment Policy, he should have sufficient funds to pay off his mortgage.

Due to a previous Heart Attack, William could not get an Endowment policy so he went for a 25 year PEP/ISA Mortgage. He already had a 30 year Level Term Insurance policy for £150,000 which he had taken prior to having his Heart Attack.

In April 2007 their largest Account went into liquidation owing them in excess of £50,000 which in turn brought their Company down and they too went into Liquidation.

All 3 now aged 61 plus found themselves unemployed, they had taken the precaution of a Sickness Accident and Unemployment Insurance policy which had paid their Mortgage and other bills for 12 months but it was now coming to an end.

As their were no job offers for any of them they asked for some assistance in the form of State Benefits, were any of them entitled to any help ?

Hi....I have just signed the petition, I am broker and was myself unaware of this situation for ISA mortgages, will all petitioners that agree with this petition please make a comment on this thread to keep it prominent within the forum.

Good luck with the petition romford and let's hope that the members even though not home owners or directly affected by this situation will give their support for a poor government decision.

If a person using an ISA to repay their Mortgage was to become Unemployed or off work due to Sickness or Accident they would NOT be entitled to Means Tested State Benefits if the value of the ISA was over £16,000. The reason for this is the DWP treat the ISA as Accessible Savings.

The FSA being the Governments financial watchdog listed Endowments, ISAs and Pensions as suitable methods of repaying an interest only mortgage but made no mention of the DWP rules regarding ISAs. Most Endowments and Pensions used for Mortgage repayment are unaffected as they are not deemed to be accessible Savings.

There could be in excess of 500.000 ISA Mortgages in existence.

Do you think the people using ISAs to repay their mortgage should be made aware of the facts ?

ie: they may have to use the funds they have accumulated to repay the Mortgage to support themselves.

The ideal solution would be to treat ISAs used for Mortgage repayment the same as Endowments and Pensions.

If you agree, then please go to the Prime Ministers Website

http://petitions.pm.gov.uk/ISA-Mortgage/ and endorse this petition.