Homeowners who are paying into endowment policies that are no longer on track to pay off their mortgage are being urged to take immediate action or they could face losing their homes.
A survey by the Financial Services Authority (FSA), the City watchdog, reveals a high degree of inaction among endowment holders - even though many face shortfalls worth thousands of pounds.
In the past year, almost all households with an endowment mortgage have received letters telling them whether their policy is on track to pay off their mortgage.
But figures from the FSA reveal that seven out of ten households have failed to respond.
Endowment-linked mortgages were the most popular type of home loan during the 1980s and early 1990s, but growth projections were based on healthy market conditions at the time.
Since then, poor stock market returns combined with low inflation now means that these original projections are no longer valid - and millions now face a shortfall on their loan.
Half of the endowment holders who have not taken action said the reason was that they now had other means to pay off their mortgage. The other policy holders - equivalent to 3.65m households - have failed to take any remedial action.
"Making sure you can repay your mortgage loan is one of the most basic financial needs," said Christine Farnish, director of Consumer Relations at the FSA.
"If there is a risk that you won't be able to, and you're not comfortable with that, then now's the time to decide on what to do. If you need to put more money aside to pay off your mortgage, it's a lot less painful to do it sooner rather than later," she added.
Experts fear that if they do not act now, they will not be able to pay off their loan at the end of the mortgage term, and could lose their homes as a consequence.
About 10.5m endowment holders should now have received a colour-coded letter which outlines how much their investment needs to grow to stay on track.
As many as 14.6% letters, just over 1.5m homeowners, have been sent 'red letters' warning homeowners that their policy needs to grow by more than 8% to meet its target.
Three in ten owners who have received 'amber letters' have been told to keep a close eye on their policy, whereas the 53.9% of mortgage holders who have received 'green letters' are likely to remain on track as long as the stock market grows by 6%.
But critics argue that the letters - sent by endowment providers - may only confuse policy holders further.
They also accuse the government of betraying endowment holders, after it ruled out a comprehensive investigation into the sale of endowment mortgages last year.
It is now up to individual policy holders to pursue their own compensation claims. So far, only £35m has been paid and to about 11,000 complainants.
The FSA is encouraging people to make claims to the Financial Ombudsman Service if they feel that they were not informed of the risks associated with the policies.
Despite revised projections, mortgage experts warned people last week not to surrender their policies. But they should also not top-up their plans according to their insurance company's projections.
Pat Bunton of London & Country, a mortgage broker, said: "Do not throw good money after bad. The best solution is to reduce your reliance on the endowment, and repay the loan by other means."
Bunton suggests moving any projected shortfall into a repayment loan. This will ensure that both the underlying debt is paid off each month.
The FSA's fact sheet "Your endowment mortgage - time to decide" can be found on its website.
"If you do not take some action now, when your mortgage matures you could face a big debt"
"You could be due compensation"