THIS TRANSCRIPT IS ISSUED ON THE UNDERSTANDING THAT IT IS TAKEN FROM A LIVE PROGRAMME AS IT WAS BROADCAST. THE NATURE OF LIVE BROADCASTING MEANS THAT NEITHER THE BBC NOR THE PARTICIPANTS IN THE PROGRAMME CAN GUARANTEE THE ACCURACY OF THE INFORMATION PRINTED HERE.

Tape Transcript by JANE TEMPLE

MONEY BOX LIVE

Presenter: Paul Lewis

Guests: Deborah Arnott Alistair Conway Paul Cooper

TRANSMISSION 8th OCT 2001 1500 - 1530 RADIO 4

ANNOUNCER : It's two minutes past three and time for MONEY BOX LIVE with Paul Lewis:

LEWIS: Hello and today we answer your questions on endowment mortgages. More than 10 million people have an endowment mortgage and already about 5 million of them have been told that the endowment, that's the investment part of the deal may not be enough to pay off the loan at the end of the term. Those estimates were made more than a year ago. Since then the stock market has fallen nearly 25%, so there are growing worries that even more people will be left in debt when their mortgage term comes to an end. Surveys have shown that millions of these people were told by sales staff that the endowment was guaranteed to pay off their loan when in fact of course it was not. If they've lost out financially they could have a claim for compensation - 10 days ago one endowment seller - Winterthur - had to set aside 10 million pounds to pay compensation to about 10,000 customers and was fined more than half a million pounds. Other major companies are pulling out of the endowment mortgage business altogether as sales fall. Not everyone can claim compensation or indeed wants to but they still have the pressing worry of how to make sure they have enough money to pay off their mortgage loan at the end of its term. So lots to talk about. Whatever your question you can call Money Box Live now - 08700 100 444 And with me today to answer your questions about endowment mortgages are Deborah Arnott, who's head of Consumer Education Services at the City regulator - the Financial Services Authority. Alistair Conway, an independent financial advisor who specialises in endowments at Clear Financial Management, and Paul Cooper who runs Claims which helps people claim compensations when they've been mis-sold financial products. Now the first question is from Catherine who's in Manchester. Catherine, your question?

CATHERINE: Oh hello. I bought a new house in January and transferred an existing endowment mortgage which I've had for a period of just of over 10 years. I had a letter about a year ago to say that the - the endowment would well cover the repayment of the mortgage but I'm now wondering if it would be wiser to change my mortgage to a payment mortgage and keep the endowment policy going at the same time?

LEWIS: Well I think that's a very apposite question cos of course stock markets have been performing particularly badly over the last year. Alistair Conway, what do you advise Catherine to do?

CONWAY: Catherine good afternoon.

CATHERINE: Good afternoon

CONWAY: I think you're right to be concerned in light of what's happened in the last 12 months. What I think you should do first is probably go back to the insurer and ask the same question that was asked of them 12 months ago - i.e. how am I doing against the targeted amount of mortgage I need to repay? I think second point is to just bear in mind that the plan or the numbers you were given will allow for - what have you got another 15 years left on the endowment?

CATHERINE: 13 years CONWAY: 13 years. They'll have assumed that it will continue to grow by 6% a year on average for the next 13 years and despite the tragic events and thus the bad performance of the markets over the last 12 months, particularly in the last few weeks, I think it's quite important to bear in mind that this is a period of time - 13 years. So I wouldn't rush to make any quick decision. I think the idea of converting your mortgage to a repayment has some merit in the fact that the endowment could be used for other purposes later on, but you may find the whole exercise quite expensive, so I think the first thing is go back to the insurer - find out if you're still on target. If you're still on target now despite the events of the last 12 months you're probably in quite a secure position.

CATHERINE: Right

LEWIS: And Deborah Arnott, just explain to us why Catherine and 10 million other people were in fact written to by insurers last year?

ARNOTT: Because in the light of changing conditions; falls in interest rates, falls in inflation, the growth rates going forward have been reduced and are lower than the growth rates on policies when people, many people took them out. And we wanted to make sure that the industry made clear to people what the position might be longer term, given the change in investment conditions. And I think Catherine's quite right that you know, even in the last 12 months there've been changes and in discussion with us the industry has agreed to send out letters every 2 years, and some will be sent - sometimes we'll send them out every - every year from July this year. So people will be getting regular updates, but I think if Catherine thinks she can afford - if she wants to be certain that her - that she'll be able to repay her mortgage then a repayment loan is a more certain way of doing that than the endowment, and if she can afford to keep the endowment as a savings plan rather than as a definite means of repaying her mortgage, then that's probably a sensible way forward.

LEWIS: Yes I suppose we should - we should explain at this point to some no doubt puzzled listeners that an endowment mortgage is two deals - it's a mortgage where you borrow money to buy a house, you only pay the interest so after 20 years you still owe the full amount, you've also invested in an endowment and you hope with your fingers crossed that that endowment will be enough to pay off the loan. And those are the fears, that that investment won't have grown that much. But from what - what we've - what we've heard Catherine, it seems that it's - you're probably okay. Wait till you get the next letter next year and then start wondering cos you have got really plenty of time to take some action. Let's move on to Yeovil now where Lesley is waiting to talk to us - Lesley?

LESLEY: Good afternoon. Similarly, we bought a house almost exactly four years ago and our Allied Dunbar representative suggested that we might back this up with an adaptable endowment plan.

LEWIS: So this was - you referred to the firm there - I think it's Allied Dunbar - sold you an endowment mortgage four years ago?

LESLEY: That's right And at the time it was suggested that the endowment would cover a target amount of �50,000 plus something to spare.

LEWIS: So Lesley you were actually told that the endowment would not only pay off the loan at the end, but would give you something in edition to spend?

LESLEY: Yes it would. This was not a guarantee - this was verbal from the representative.

LEWIS: Yes it's quite persuasive though isn't it?

LESLEY: It is very persuasive.

LEWIS: Let me put this to Paul Cooper. Do you think Lesley has been mis-sold this product?

COOPER: Well from what she says I would have thought yes. I think the first thing she's got to do is to write to Allied Dunbar and get hold of a copy of the fact find. Allied Dunbar has very precise fact finds and they tend in my experience to try and tie up almost every sale so that it appears to be justified.

LEWIS: The fact find is the - is the initial interview where you find out all the facts about the person who you're trying to sell something to?

COOPER: Absolutely. But if she is confident and her husband is that that was the promise made and it was a firm promise, I think she's entitled to compensation and I think she needs to take urgent remedial action.

LESLEY I see that but my other worry is that even when they wrote to me in February 2001, Allied Dunbar was still suggesting that we could expect - Allied Dunbar's view I quote is that 7% each year is currently a reasonable assumption for a rate of future growth. Now, this doesn't strike me as expert advice, and if I'm using a financial - their financial advisor who is paid from - from - by me in effect, then this to me does not constitute expert advice.

LEWIS: Right Lesley, I'll put that point to our expert financial advisor here in a moment, but let me ask Deborah Arnott from the regulator first - four years ago endowments were still being sold and from what Lesley has told us - mis-sold?

ARNOTT Well one thing I'd like to be clear is were you convinced that you should take out an endowment? Did you have any idea when you were being sold this whether or not you wanted an endowment or a repayment mortgage?

LESLEY: I understood entirely that they are two separate things - that the mortgage and the endowment are as was said earlier two separate deals. But what my worry is is that this to me shows a certain - I think unscrupulousness is perhaps too strong a word but a certain sort of attitude which makes me worry about other products I might have bought from this company?

ARNOTT: If we can stick to the endowment for the moment - you feel that the advisor didn't explain the risks that it might not pay out at the time, is that right?

LESLEY: Not fully no

ARNOTT: No right. Well one thing you could do as well is look actually at the ombudsman's website because they've got examples of case studies there which show how they decide when a firm's complaint hasn't - when someone's complained about a firm and it hasn't been upheld by the firm and they've gone to the ombudsman - on what basis they decide, and you can compare your situation with examples of how the ombudsman decides. But just because - just because - just because in the fact find it says they explained things to you it doesn't necessarily mean that they were explained properly to you at the time

LESLEY: That answers my question yes

LEWIS: And Alistair Conway, what do you think that Lesley should do here?

CONWAY: Well I think the important thing is that Lesley doesn't believe, or isn't certain that she was given certain advice, and isn't clear on what was said to her. It doesn't actually matter whether the fact find says that she was. Lesley doesn't believe she was, so I think the principle is that she has the right to investigate this further. And the other - just on the other point with regard to growth rates, and this will come up a lot in these sorts of conversations - the insurers are making predictions about the future and what growth rates are going to be achievable. There is an element of them sticking their fingers in the air and making a guestimate about what they think the future's going to hold. You've got to be also a little bit aware that insurers don't get away with predicting such low growth rates that they actually remove the need almost for the insurer to be there in the first place, cos their role is to try and provide some sort of return.

LEWIS: But of course the point that Lesley made is that Allied Dunbar seemed to have been using a 7% growth rate whereas the sort of middle industry standard is 6% Deborah?

ARNOTT: That's right. We said to firms that 6% was the mid right - mid rate, but they are allowed to use slightly higher than that if they feel that it's justified and Allied Dunbar have felt that it was justified up till now. One has to understand as well that that's a longer term rate. I mean it doesn't mean this year growth will be 7% and I think that's one of the things that people looking at - 7% might seem very high this year, but if you look at it over 10 or 15 years

LEWIS: It certainly seemed quite low a few years ago. And Paul Cooper before we leave this particular question - just to be clear cos I'm sure a lot of people are in this position, if somebody wants to complain and try and get redress, briefly the stages Lesley has to go through?

COOPER: Well first they must write to the company - Allied Dunbar. They must ask for all the documents which they're entitled to under the PIA rules, and then they must run their own complaint. If the firm rejects it they have 6 months from the date of the rejection letter to take it to the ombudsman. And both the ombudsman website and the FSA website explains how these systems operate. I think it's worth adding one thing about Allied Dunbar which is that the FSA figures show that over 4 years nearly a third of their endowments went off the books. That's an argument that they weren't very well managed over the last 5 or 6 years

LEWIS: So these were people who took out a long term investment but sold it early?

COOPER: Exactly

LEWIS: Which is obviously

ARNOTT: Or surrendered it

LEWIS: Well or surrendered it yes - which is obviously not good advice, and also interesting Allied Dunbar - biggest endowment seller is now pulling out because of falling demand. Let's move on to the next question - Mark from London.

MARK: Hello there.

LEWIS: Hi - what's your question Mark?

MARK: My question is I have to upgrade my endowment because I've bought my partner out of the flat and I was wondering where I can reliably find an extra endowment plan to top it up, and the second part of the question is - is this a wise move at this stage?

LEWIS: Well looking around the room I think probably not, but let's ask Alistair Conway what he would advise you to do?

CONWAY: I was just wondering Mark, why particularly you thought of - of going back and having another endowment? Are you pleased with the endowment you've got at the present moment in time?

MARK: Not particularly no. I have been advised it may not make the �30,000 that's assured at the moment and - but I bought my partner out of her - out of the flat and so I now own the place and essentially I've got to find a way of topping up the endowment to cover the loan as it stands at the moment.

CONWAY: Well I think Mark you've got to go through the exercise that you probably went through when you took out the original endowment, which is to find somebody who can provide you with a comparison of all the various ways you could repay the additional mortgage debt that you are now responsible for. Now that might be a repayment mortgage, you might link it to an ISA and those two are the most common these days, so you've got to make a judgement about which of those you feel is most appropriate and probably being much wiser about this particular market than we all were many years ago when you took out the original endowment - you need to look very carefully at exactly what's being offered to you and the risk profile of each alternative that you are offered.

LEWIS: And should make it clear perhaps to Mark that he can for this other bit of the mortgage have a repayment mortgage or anything else - he doesn't have to have an endowment?

CONWAY: Absolutely - and indeed, he could have different terms on different parts of the mortgage that he's got left to pay.

LEWIS: Do you think endowments are a good idea for anybody now Deborah Arnott?

ARNOTT: There are certain circumstances in which endowments might be a good idea but I think people really do have to understand the risks. I mean it does mean you can in certain circumstances borrow more money than you might be able to if you had a repayment mortgage and there are

LEWIS: That's not necessarily a good thing?

ARNOTT: No it's not but that's up to people's individual choice. We certainly haven't felt the need to ban them (talking over)

LEWIS: You haven't banned though have you?

ARNOTT: But we have tightened the controls on them and as a result there are far fewer endowments being sold.

LEWIS: So Mark I think you need to see a good advisor or mortgage broker and talk to them about the alternatives for funding this second mortgage that you've got and don't just jump in for an endowment which you know if you're a hole stop digging

MARK: It's a little more complicated in that I already have the whole loan so I've really got to find a way of bridging that gap now rather than later

CONWAY: And making up the shortfall I imagine Mark?

MARK: Exactly yes. They're being very lax about it - they're not pressing me for it but I've got to do it sooner or later.

CONWAY: Yeah I mean the fact they're being lax, they're not the ones who've got to repay the debt, so I think the key thing is get some numbers and start getting your head around what's involved, and the costs involved.

MARK: Could I ask a question as regards phraseology on the original contract for the endowment?

LEWIS: Well very quickly - I'm not sure we'll be answer it but try us?

MARK: Right, under principle benefit it says - on the endowment date the value of the unit standing to the credit of this policy subject to any minimum amount payable in accordance with the maturity guarantee provision - does that basically mean that they have assured they're going to pay my �30,000 no matter how

LEWIS: No no - No I certainly didn't understand what it meant at all, but it certainly doesn't mean that. Anyway, so but just - just to be clear about this Alistair - if Mark goes back to his lender the other bit of the loan he's now taking responsibility for can be converted to a repayment mortgage if he wants?

CONWAY: Indeed and could be part to cover the short fall on the original endowment.

LEWIS: Right, okay - let's move on from Mark then - I'm sure not an uncommon problem there Mark and talk to Ann who's in Bedford. Ann, your question?

ANN: Oh good afternoon. I took out an endowment mortgage with the Woolwich in l994 and I feel that I was led to believe that a rate of interest at 7.5% it would clear it in 25 years, but they're now telling me that even if it's a 6% rate I'll be �15,000 odd short at the end of it.

LEWIS: Yeah so initially they were assuming investments would grow 7.5% - now they're assuming 6%. Paul Cooper?

COOPER: Well the first thing that comes out of that is why you were sold an endowment Ann because I note you are single?

ANN: That's right

COOPER: And endowments have compulsory life assurance attached, so it was probably the wrong policy for you. You didn't have any need for life assurance in 94 did you?

ANN: No and also it was either a trainee or a newly qualified person that was selling it to me cos she kept having to pop out and ask for advice.

LEWIS: Well that gives you a lot of confidence. Ann, just to go back to this - this life assurance question. I mean the fact you're single doesn't mean you don't necessarily have dependents.

ANN: No but I haven't

LEWIS: You have no dependents? So that's the key thing isn't it? - if you have no dependents Deborah Arnott - is selling life insurance a mis-sale?

ARNOTT: Not necessarily, but it does seem ill advised, and was it ever raised with you whether or not you needed this life insurance?

ANN: No

ARNOTT: Cos that should have been dealt with

ANN: Not that I can recall but obviously

LEWIS: So there maybe a mis-sale so maybe compensation and we talked about how to do that, but Alistair Conway, the other question that Ann has I think is that she might have a shortfall -how does she make it up? What's the best advice there?

CONWAY: Very different for different circumstances, but I mean you've got - how many years to go until the mortgage is due to be repaid Ann?

ANN: I took it out in 94 and it was for 25 year

CONWAY: Right so 17 years something like that

ANN: Something like that

CONWAY: Again you need to start getting some numbers either from the mortgage provider telling you what a repayment mortgage would be for the part that's now longer - no longer going to be repaid by the endowment so if we've got a shortfall of 15 I think you said, from 50 - then 15 of that needs to be converted to a repayment mortgage.

ANN: What I was wondering was whether I could sort of just pay �1000 a year off of it?

CONWAY: That's another way of doing it - i.e.. when you've got a lump available knock it off the mortgage, so you get the 50 down towards the 35 as and when capital's available.

LEWIS: This of course means that you'll owe less so if the endowment doesn't perform it may still cover the mortgage but of course you have to check with the lender because there can be penalties. Sometimes you'll give them �1000 and it won't be taken off the debt for months, if not a year?

CONWAY: Indeed. I think the other thing is not - not to get too reliant on finding lumps of capital because they may be available at the moment but they might not be 2 or 3 years down the road. Have a structure for repaying the debt. If you can speed it up by putting lumps in, all well and good. And just make sure that the conditions allow - the mortgage allow you to do it.

LEWIS: And of course with falling interest rates, instead of taking that as a benefit and reducing your payments you could keep them the same which is over paying and that would bring the debt down - Deborah?

ARNOTT: But also I would say if you think you were mis-sold and were the risks properly explained to you in l994 when this was sold to you - that it might not be - it wasn't guaranteed to repay the target amount?

ANN: I don't think it was but you know it's a long time ago.

ARNOTT: Did you - were you asked whether you wanted to be absolutely sure that this means of repaying your mortgage would pay off the mortgage at the end?

ANN: No I don't think so - no I don't think

ARNOTT: I do think that given the life insurance point as well it would be a good idea for you to check out whether or not you think it's worth complaining, and we have a good fact sheet which helps you decide whether or not you've got a justifiable complaint.

LEWIS: Okay Ann, so a number of things to think about. Pay off a bit more and perhaps claim some compensation too. Let's move on to Kevin now who's ringing us from Leamington Spa - Kevin, your question for the panel?

KEVIN Hello yes. I hope I feel like a lot of people out of the 10 million - I'm absolutely outraged quite frankly at what some of the things I've been listening to - I don't know your name, I've forgotten what you said earlier on in the programme about there's a hope that these investments, these endowments will pay off. Now, kind of similar to the lady before but also going back to Lesley - I took out a combination mortgage in l993 - and a repayment and an endowment

LEWIS: So it's a joint - part of it�.

KEVIN: No the repayment's been paid of. The endowment is due to mature in 2018 - so I've got 17 years, but in February this year I received from my lender the Abbey National a notification that 6% growth and even 8% growth would leave me with a shortfall. Now I have a colleague convert her endowment to repayment several years ago - so in year three and in year five I contacted the Abbey National and asked them about my endowment and how it's performing cos I receive these annual statements every year and said look is it going to pay off my mortgage, let alone give me that cash lump sum. And I was told it was far too early to make any projections and now here I am in year eight or from February this year which wasn't even year eight - was in July and being told that there's no guarantee. And your comment that it's like a hope - I mean I received my annual statement this year with a nice little logo - Abbey National - because life's complicated enough and a document that says you know the stock market has the most growth potential over the long term?

LEWIS: Yes well I did use the phrase hope and that I think is the honest phrase - we take out these in the hope (talking over ) now a lot of - a lot of sales people imply it's a guarantee?

KEVIN: As Lesley said though earlier we're relying on these people - experts so called financial advice, and I remember going in in 93 - I took out my loan with the Abbey National cos of a quirky situation that arose in the interview and the chap had told me that 6% would be well enough to pay off and give this kind of cash lump sum and I was like obviously 25 years down the line and index linked. Forget cash lump sum - but paying off what you're actually lending is of crucial importance to us - 10 million people

LEWIS: Absolutely Kevin - let me put these points to the panel because you've made them very well and I think they're very commonly held views. Kevin's a person who's been told that even at 8% - the higher level of growth there'll be a shortfall - this is what you call the red letters - about one and a half million people are in his position aren't they Deborah? He must clearly have been mis-sold this product?

ARNOTT: Well it's quite difficult

LEWIS: You're not going to say not necessarily to me again are you?

ARNOTT: Well I think the point is that it's not about whether or not there's a shortfall cos that's about growth rates, it's whether or not he was properly explained the risks at the time, and if you didn't realise it wasn't guaranteed to repay the mortgage at the time then it wasn't properly explained to you.

LEWIS: So it's the explanation rather than the shortfall?

ARNOTT: It's the advice rather than the shortfall.

LEWIS: Paul Cooper what do you think of this?

COOPER: Well from what he's told us on air it seems quite clear he's got a justifiable complaint. He was told he would get more than his mortgage debt back. That sounds to me like a contractual guarantee. And if people are quite clear in their memories as to what happened, that in itself should be enough. The law takes the view that if people are told something quite clearly they can rely on that promise.

LEWIS: Cos a contract can be verbal as well as in writing - that's an important point to remember. So, the other point is that he was promised, or at least he says he was promised as many people were, that he'd not only pay the mortgage off but he'd have more and yet in the guidelines from the FSA that doesn't seem to be taken into account, Deborah?

ARNOTT: Taken into account in what way?

LEWIS: Whether it was a mis-sale because people are not just expecting to pay off their mortgage - they're expecting to have a bit as well aren't they?

ARNOTT: Well I think that the important point is whether or not the risks were explained, and whether or not they said it would definitely pay off just the mortgage amount of the mortgage amount plus a little bit more is neither here nor there I think.

LEWIS: Right, but if they did do that and didn't explain the risks he could have a claim?

ARNOTT: Yes absolutely

LEWIS: Alistair?

CONWAY: I'd just like to make the point that if you think about the principle of an endowment, unless an endowment mortgage was a lot cheaper than a repayment mortgage, the only reason somebody would have taken an endowment mortgage was that they were hopeful that they would do better than repay the debt. Now, when interest rates were high actually endowment mortgage did come out cheaper than the repayment mortgages, but I think there is a bit of a gray area here, over and above what the FSA have done is that the perception when these were sold was you'd do better than just repaying the debt - it was a nest egg on top.

LEWIS: So, don't get mad Kevin, get even. Go for the compensation scheme and as we said details of how to do that, or at least how to find out more about doing that will be on our website and on the websites of the Financial Services Authority and the Financial Ombudsman Service. Let's talk to Shirley now in Watford - Shirley?

SHIRLEY: Oh hello

LEWIS: Your question?

SHIRLEY: I've got a Standard Life Flexible and it's 16 years to run and it's split between an endowment and a repayment. If I make extra payments of say �300 a month to try and reduce, should I split it between the two or pay off one or the other?

LEWIS: Right, so you're in the happy position of being able to pay off more than you have to on your mortgage, and you want to know what the most financially effective thing - Alistair?

CONWAY: Hello Shirley

SHIRLEY: Hello

CONWAY: I would - I would trick yourself into taking the safe route, and I would probably suggest you knock it off the endowment part.

SHIRLEY: Off the endowment?

CONWAY: Yes, the reason being is that if the endowment's going - if either side - the only part that's going to fail you is the endowment part because it falls short.

LEWIS: So, knocking it off the debt that the endowment's supposed to cover?

CONWAY: Off the debt that the endowment is linked to

LEWIS: Not putting more into the endowment no?

CONWAY: Correct, no don't give anymore to the endowment company. Knock it off the debt linked to the interest only part of your mortgage. That way the repayment part we know will do the job of clearing that half. And you're taking the pressure off the endowment achieving its objective which it was originally set up for. So, if you get, if you get a letter in 3 or 4 years time suggesting you've now got a shortfall on your endowment, you've already built up a safety net incase that happens. Now, I'm not letting the insurer off the hook. They should still make sure they do their job and repay the mortgage with the endowment part, but to protect your position I would be inclined to pay it off the endowment part.

SHIRLEY: But if you take it off the repayment side and kept your original payments the same, would I not be reducing the years so I could settle that side of it earlier?

CONWAY: Or - you could do it that way round if you wish to do so and therefore you'd end up with only half of the mortgage left for maybe the last 3 or 4 years.

SHIRLEY: Yes, but it doesn't - you don't think it matters which way round I do it?

CONWAY: I would - simply because I'm concerned that you will be - your endowment will expose the position later, I think my safety first option would be to go to pay it off the endowment.

SHIRLEY: And would you leave the repayments on the endowment as they were or - because they say to me - well if you pay some off we'll reduce your payments, but I mean that's not the point. I'm trying to save - I mean

LEWIS: This is a good point.

SHIRLEY: if I've got the extra money, I don't want to save like a couple of pound a month on the payment.

CONWAY: I think keep the payments where they are, and improve your position by reducing the size of the debt.

SHIRLEY Ah right

LEWIS: Shirley thanks very much for your call, and let's move on now to Roderick in Cambridgeshire - Roderick?

RODERICK: Oh good afternoon. I'm probably one of the more fortunate people when it comes to endowment mortgages. I have a small endowment mortgage with Halifax and Scottish Widows, and I do have sufficient funds to pay off the mortgage. Do you think I should do so?

LEWIS: Well let me go to

RODERICK: I only have about two and a half years to run.

LEWIS: Let me go to Alistair again?

CONWAY: Yeah I would - I would pay the mortgage off and I would save the interest.

RODERICK: Use the money and invest it?

CONWAY: Well, if you - the best way of you guaranteeing the return in this market is to repay your mortgage and therefore save the interest you're paying on your mortgage.

RODERICK: Yeah I get you

CONWAY: So, I can't - I can't tell you of anyway you could put your money at the moment that's going to match the interest you're paying on your mortgage with any degree of safety.

LEWIS: Paul Cooper?

COOPER: One small point. If you do do what he suggests, you've then got life cover which you don't need, so you might see whether Scottish Widows will knock that element out of the endowment and give you a bit more money on it. They might, they might not - I don't know.

RODERICK: Of course I would keep the policy on - silly not to

CONWAY: Most insurers would in fact or most of them will if the contract will allow - will allow you to adjust the amount of life cover to pick up the point Paul's just made - reduce that. You will have to keep some in place though

LEWIS: Let's move on - we've

RODERICK: Okay thanks a lot

LEWIS: Thank you Roderick. We've just got time to squeeze in Ernest from Brighton - Ernest?

ERNEST: Oh hello there. Yes, the first caller their question's similar to the one I was going to ask. It's about whether it's worth continuing paying an endowment. I've got 11 years left to run on one so it's due to come to fruition in 2012, but when I became concerned about it performing I was advised in Spring 2000 only to expect �17,000 from it so there's going to be a shortfall of �7,500. Now I was wondering whether I should continue paying it?

LEWIS: Let me just put that -not very much time. Alistair, should he carry on paying into it?

CONWAY: I'm - bearing in mind this policy's been running 14 years, I'm reluctant to see him surrender it without a fight. I think two issues - number one, someone needs to do the mathematics here. It is a mathematical equation. Secondly, don't surrender it if he's going to do anything with it - sell it, cos there is an active market in second hand endowments.

LEWIS: But they are long term policies aren't they and you should keep them to their maturity?

CONWAY: If possible, I think he needs to be absolutely certain.

LEWIS: And if not, sell it on the market

ARNOTTT: Well the prices are falling at the moment.

LEWIS: Thanks very much. That is all we have time for. My thanks to all the callers - Deborah Arnott, who you just heard from the Financial Services Authority - Alistair Conway, from Clear Financial Management, and Paul Cooper from Claims. More details of anything raised in the programme, you can ring the action line 0800 044 044 Calls are free: 0800 044 044 Or our website: www.bbc.co.uk/moneybox. I'm back at noon on Saturday with MONEY BOX for the personal finance stories of the week. And I'll be taking more of your calls on MONEY BOX LIVE next Monday afternoon.

BACK ANNO: That was Paul Lewis and the producer was Penny Haslam.