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AVIVA - EQUITY RELEASE - Redemption Penalty Help needed please !


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Hi Aviva

 

My Mother in law (and late Father in law) took out an Equity release deal with NU (now Aviva) in early 2002

 

They did sign on the dotted line and had IFA advice (family member who was an IFA) ....they wanted to tuck some money away for the future plus pay off a few bills....although in truth they did not understand the nature and impact of the redemption penalty rules (few would..)

 

11 years on she is a lonely widow and wants to downsize from the house - her husband died 5 years ago now and she is lonely + its to big to heat and manage, the stairs are becoming a struggle for her and in truth we would prefer her nearer to us now in a retirement home and in a quieter area (she is in Bromley Kent).

 

we are over an hour away and want her 10 mins away ....Summary the £50k loan is now £118k......cant despute that .....but the redemption penalty clause states its based on the Redemption Gilt yield differential between Jan 2002 and the date of redemption for the UK 2028 6% Treasury bonds

 

ouch ! - current yield is around 2.7% vs 4.7% in 2002..........the rules state that even a 2% differential equates to a 50% penalty on the original loan (thats another £25k on top of the £118k)

 

The IFA family member died a few years back and the IFA came for a chat then - but were not interested in her as there were no more commissions to be earned ..........so I had to write to aviva last week to request full costs and terms if we do close out the Loan.........

 

we have the document and its £135k including a £15,000 redemption fee at current rates

 

I have written to my solicitor for advice

 

Meanwhile perhaps here I can request directly heres that someone at Aviva can review this contract now and reduce (or at least cap) the somewhat incredulous penalty fees ?

 

I read that in 2004 a (25%) cap was placed on the NU/Aviva penalty clauses due to the unfair nature of earlier agreements - so could I at least request that ?

 

my other issue is that due to the dynamic market I have no lock in to what this redemption will be until the actual day of redemption ........this means I am trying to agree a moving net price with the retirement home .......this is not good and is causing a lot of grief for the family as it will take a few months to sell the house and we need every penny to secure a nice property

 

and no I do not want any further offers of more equity release ..enough is enough

 

thanks to Aviva in advance for some urgent advice.........just a contact will do please

 

thanks

Neil

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Guest Aviva Support

Hi NVP

 

Thank you for your post. If you can email me at social@aviva.co.uk and include the following details for your mother the policy holder, I will pass your query on to our the right team, get them to look into this for you and answer some of your questions.

 

Full Name

Date of birth

Post code

Policy Number

 

As the policy is not in your name we will need to contact your mother to confirm with her that she is happy for you to deal with this on her behalf, but as soon as i receive the details we can start processing this for you and hopefully get it all swiftly resolved.

 

Kind regards

 

Dave

 

 

Dave Hyam

Aviva Social Media Team

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  • 2 months later...

Hi Everyone after numerous hours of arguing - at least 1 failed attempt by Aviva to calculate the correct penalties and about 20 E-mails ...............I have yesterday received final confirmation that aviva will not uphold my complaint or be reducing the redemption penalty on my mother in laws terminated Agreement £150,000 of costs and fees including a £30,000+ redemption penalty based on Gilt yield differentials................a very unfair clause and approach that should never have been offered or sold into the deal without other options such as a cap. Not only will I now be escalating this to the onbudsman, the OFT and the courts but also Watchdog..............Aviva please dont cover this post again with a PR stunt and try to soften the message .................I mean business and will not walk away from this and neither should anyone else who is subjected to this 1 sided process........and dont tell me that Aviva is correct and legal ground - the redemption clause stinks ................if you look at the papers you will know that banks are provisioning hundreds of millions for missold derivatives which amounts to the same thing ......so its one rule for businesses and another rule for consumers not this time........if anyone can offer assistance or help or advice please e-Mail me at my trading business address [site team edited] thanks Nvp

Edited by honeybee13
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Hello there.

 

I've edited out your email details in line with site policy. For the protection of all concerned, advice should be sought and given on thread please.

 

HB

Illegitimi non carborundum

 

 

 

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  • 1 year later...

Hi there. I am a volunteer for social enterprise that does free complaints advice and Advocacy. I would suggest looking at the misselling of the product by the IFA. I would suggest contacting his network (who would have done his compliance) to raise the complaint.

 

We have had a good few of these complaints upheld recently but they tend to take time and lots of looking into the paperwork at the point of sale. Do you still have this?

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  • 6 months later...

Im facing the same problem with my mother who is looking to downsize and facing a £30,000 charge on an original loan of £25,000!! I was wondering whether you have had any luck in your dealings with the onbudsman etc. It seems criminal what Aviva are expecting us to pay this!

 

Any advice/info you can give would be much appreciated.

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Guest Aviva Support

Hi Jonbearwood99

 

As above I'd be happy to arrange for one of our team to look into this for you should you wish?. If so please send me your mother's

 

Full name

Date of birth

Post code

Policy number / reference

Your CAG username so I can link your post to the email

 

As the policy is not in your name we'll also need to contact your mother to confirm she is happy for you to deal with this on her behalf, but as soon as I receive the above details, we can start getting this looked at.

 

I'm at social@aviva.co.uk and await your email.

 

Many thanks

 

Dave

Aviva Social Media Team

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  • 1 year later...

jonbearwood99 - how is you situation progressing?

 

My mother-in-law took out £50k in 2001,

ERC is currently £24K !??

 

 

Initial loan obviously wasn't suitable for need or circumstances

- as they put it into savings!

 

 

Infact there is still £30K of it in savings!

 

 

Father-in-law has passed away so trying to downsize,

 

 

but interest and ERC are making it almost impossible.

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  • 10 months later...
Im facing the same problem with my mother who is looking to downsize and facing a £30,000 charge on an original loan of £25,000!! I was wondering whether you have had any luck in your dealings with the onbudsman etc. It seems criminal what Aviva are expecting us to pay this!

 

Any advice/info you can give would be much appreciated.

 

My dad is also facing the same problem

 

 

he put n a complaint of misselling only for Aviva to uphold their decision that it wasn't Missold because they internally investigate and it's obvious they will not go against their own company

 

 

my mum and dad took theirs out 12 years ago sadly my mam passed away 2 years ago and the house is too big for him now and wants to downsize

 

 

Aviva are not interested in this

they just want the property at its current value and not the value at the time of the release,

 

 

they have told him to transfer to another property would cost him £25k and to settle early would cost him £10k

 

 

it's now in the hands of his solicitors who said if he had seen all his paperwork before he signed he wouldn't have let him sign it .

 

Would be interested to see how you guys get on and will keep you updated as to how my dad gets on

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the original thread is now over 3yrs old

and has been yearly bumped by new posters since

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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