Complain if your endowment runs into retirement

This financial year could be the crunch one for many people who took out endowment mortgages and now believe that the endowment will not produce enough money to repay the loan. As these products were widely sold in the 1980s and 1990s, most of these people are over the age of 50.

There are particular issues that affect people heading towards retirement. An estimated 15 per cent were sold plans that ran beyond their retirement date. This could be the basis for a complaint since few people in retirement have the money to finance both a mortgage and an endowment policy. There can be exceptions, but the basic rule has to be that it is better to have paid off your debts while you are still earning. There is also a strong case that if you had to have a mortgage into retirement it should have been a simple repayment one rather than a more risky endowment.

So, if you have a mortgage endowment which runs until you are 67, for instance, do you have a case for compensation? You may well do, believes former ombudsman Adam Samuel. But some financial institutions are turning down such claims on the grounds that they were mostly time-barred six years after the endowment plan was started. The institutions argue that such compensation claims can usually only be made within six years of a problem presenting itself - so, since everyone who took out an endowment would have known their age at that time, they would also have known that the plan was going to run into their retirement.

Samuel believes this is wrong: 'The customer does not know that he or she has suffered a loss due to the bad advice until the calculation is done comparing a repayment mortgage with the correct term and the current situation.'

So if you have yet to make a complaint, wave a copy of this article at the financial institution you are dealing with - and at the Financial Ombudsman Service if your complaint ends up there.

However, most people are running out of time to complain under the framework agreed between the financial services industry and the regulators. Overall deadlines have been set for sorting out claims and some have already been passed, affecting about 10 per cent of the 5 million who may have been mis-sold to. Prudential used not to enforce time-bar rules but succumbed last week, and so time is running out for all endowment holders.

The ombudsman expects 2006/07 to see the peak of endowment mis-selling claims.

· The ombudsman has useful information about how to complain (www.financial-ombudsman.org.uk or call 0845 080 1800). The consumer organisation Which? has also produced guidance on www.which.net/endowmentaction.