It's too late to complain about my endowment

I TOOK out an endowment mortgage on August 1, 1992, for £24,000. A year or two later I transferred to a repayment mortgage, but kept paying the endowment part. This was to provide me with a lump sum as I didn't have a pension plan. I have paid this ever since and subsequently received warning letters saying the policy wouldn't make its target etc. It's a with-profits policy with Legal & General. I pay £45 per month.

The last shortfall was reported in May 2006 as one of the following: £9,200 or £6,000 or £2,200 depending on the projected future growth. The most likely being a £6,000 shortfall. It matures on August 1, 2017, when I will be 65.

I have complained to the ombudsman but Legal & General says I'm out of time. Would I be better to surrender the policy? Is there a particular time in the year when it would be best to do this?

Jean Cameron (by e-mail)

? Tom McPhail, Hargreaves Lansdown's head of pensions research, writes:

THE majority of endowments are now 'time-barred'. This means that investors have been given sufficient notice of their right to complain, and have now run out of time to do so.

Unless you can demonstrate some specific reason why the time bar should not apply to you, such as you didn't receive the appropriate notification, then it is probably too late to seek redress from Legal & General.

You could just keep paying the endowment premiums for the next 10 years. Legal & General has one of the better with-profits funds, so this is an option. Given that you are actually saving as a 'pension', there is also a strong argument for cashing in your endowment and paying the money into a pension. If you do this before April 5, 2008, then the Government will top your money up with tax relief of 28%. After that date it will drop to 25%.

There are restrictions on paying pension contributions. You can claim tax relief on the contributions up to 100% of your income in any tax year (capped at £225,000). If you don't have any earned income, then you can still contribute up to £3,600 a year to a pension. If you pay your £45 monthly payments into a pension, then they will be topped up to £57 by the tax relief.

You also need to consider what the position would be if you died before the expiry of the mortgage. Will you need to replace the life cover, or are you satisfied that it could be cleared from assets elsewhere.

If you do invest the money in a pension, then it would pay out the full value of the fund on death before retirement. You should also remember that with a pension you can only encash 25% tax-free and the rest must be used to buy a pension by the time you reach 75. An endowment can all be taken as a cash sum.

There is no best time of the year to surrender an endowment. Surrender values do fluctuate from one year to the next, but it isn't worth trying to second-guess them.