The Wilkinsons currently face a �17,000 shortfall

Listen to the programme

Neil and Kate Wilkinson live in a small village just outside Gloucester with their three children.

They have always planned their finances sensibly and been careful with their money.

But like millions of others they now find themselves in a worrying position.

It looks almost certain they will not have enough money to repay their mortgage.

Endowment mortgages

Back in the late eighties Neil and Kate decided to take out one of the popular and heavily sold endowment mortgages.

At the time, they were widely regarded as the cheapest way to repay your home loan as they also offered the incentive of a tax free lump sum once the loan was cleared.

Unlike a repayment mortgage where you repay some of the capital as well as the interest on the loan each month to your lender, with an endowment mortgage you make payments to two companies.

You pay your mortage lender just the interest you owe on your loan every month and at the same time you pay an insurance company for an endowment policy.

This is an investment linked to the stock market. The hope is that it will grow at a rate to pay back your mortgage in full at the end of 20 or 25 years as well as giving you some extra cash.

It also provides life insurance cover, which is essential for most homeowners.

The problem

In the past endowments often delivered handsomely - paying back peoples' home loans in full and leaving them with a healthy profit to spend as they wished.

However, falling interest rates and poor returns from the stock market have had a big impact on their growth.

Today insurance companies simply can not continue to pay out the high returns they used to.

The industry body, the Association of British Insurers, has instructed its members to write to all endowment policy holders on a regular basis to tell them what they can expect to get back in the future.

For millions of homeowners with endowment mortgages these letters have brought bad news.

Their policies may not achieve the growth rate they need to pay back their mortgage, let alone give them back any extra.

And if market conditions remain subdued this problem will only get worse.

The dilemma

Neil and Kate Wilkinson are facing a potential shortfall of �17,000 - nearly half the total amount they owe on their home loan.

With 10 years left on their mortgage they have no way of knowing how much the eventual shortfall will be.

It could turn out to be greater or smaller than this.

Ten years of uncertainty was too much for Neil Wilkinson.

He decided to join Inside Money to work out how he could tackle this shortfall and what he should do with the endowment policies he feels have failed him and his family.

The only thing he knew for certain was that doing nothing was not an option he could afford to take.