Selling your endowment could give you financial control

Publication date | 15/03/2010

Britain's 30 million credit card users have been told by prime minister Gordon Brown they are set to enjoy more control over their finances, which could prevent them from falling seriously into debt.

Credit and store card firms and the government have joined forces to put in place changes to borrowing practices in the UK.

People will now have a say on whether or not they are offered credit limit increases and they have a right to reduce their own limit at any time.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers with credit cards and personal loans had decided to sell their underperforming endowment policies to raise the cash required to help stay on top of debt, giving them more control over their long-term finances.

Giving consumers control over their money

All consumers will also be able to access their credit records for £2, although victims of ID fraud and those people receiving debt advice will be able to get the information for free.

Mr Brown announced the changes and said that the financial services industry was going through an overhaul in order to hand power to consumers.

Irresponsible lending should be helped to be stopped by the new rules. Indeed, many Britons may have turned to credit cards and personal loans during difficult times and now find themselves struggling with high, monthly repayments.

"The government's agreement with the card companies will mean the most expensive debt is paid off more quickly, better repayment plans for new customers, a ban on credit limit and rate increases for people at risk of financial difficulty and a right to 60 days to reject interest rate increases," he explained.

Clearing debt with endowment policy cash

Mr Radford, from aap, said some of its customers with climbing debts had decided to sever their reliance on credit and use endowment policy cash raised from selling their unwanted endowment policies to clear what they owed.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

Reasons to sell your endowment policy