Matthew Roche, marketing manager at Surrenda-link, said: "As we enter
a period of traditionally increasing activity in the housing market, many
home owners are clearly looking at ways of raising money to meet stamp duty
and moving costs - particularly now that the average house price has
increased to £100,000 well above the threshold for stamp duty. People are
increasingly changing their mortgage arrangements; many as a result of a new
house move or many people are taking advantage of current interest rates. As
a possible consequence of this we are seeing an increase in the number of
people releasing capital by divesting themselves of an endowment policy. In
spite of awareness increasing about the ability to sell policies, many people still do not realise they have this option – and are potentially losing out on thousands of pounds by surrendering the policy to the issuing life office.
"Although awareness of the TEP market has grown considerably in the last two years, many endowment holders still surrender their endowment policy rather than sell it and potentially lose out on an average of £1800 as a result. Implementation of the FSA’s consultation paper CP106 should remedy much of this by obliging life companies to inform those who wish to surrender their endowment policies that there exists a secondary market for policies and that this may provide the consumer with a better price than surrendering. Given the costs incurred when moving house, endowment holders should certainly ensure that they are getting the maximum value for their policies if they are intending to use this as a route to meeting these moving costs."