The FSA has told firms how they must calculate redress for mis-sold mortgage endowments. The rules that firms have to follow when handling these complaints are set out in Appendix 2 of the Complaints Sourcebook of the FSA’s Handbook (but are often referred to by firms as 'Regulatory Update 89' or 'RU89').

Basically, redress is calculated by comparing the consumer’s current financial position (taking the endowment policy into account) with what their position would be now if they had taken out a repayment mortgage at the outset instead. This calculation involves comparing the interest and premiums actually paid on the endowment mortgage with the interest and capital repayments that would have been paid on an equivalent repayment mortgage.

It also involves comparing the endowment policy’s current surrender value with the amount of capital that would have been paid off with a repayment mortgage.

It is unlikely that a firm would be able to carry out these calculations manually – or just by setting up a simple spreadsheet. As well as applying the correct formulae, firms need access to the specific rates of interest that applied to particular mortgages over different periods of time.

A number of specialist companies have designed software to carry out these detailed and complex calculations. These companies supply their software under licence – and most will also run individual calculations as a 'one-off' service. You'll find more details about these commercial services if you type key words such as 'RU89 calculations' into an internet search engine.

Look at the details of the special events we are running around the country specifically for insurance and mortgage intermediaries. If you’d like to attend an event, just turn up on the day at the venue that’s most convenient for you. You can also check out the resources and information for firms on this website.