Phoenix Life & Pensions - Endowment Policies

My understanding of endowments are that if you cash them in early the endowment company take a big bite out of the investment so continued to make payments into the endowment policies.

That is the case with many endowments but not all.

Whenever I do an endowment review, part the of check is to see whether the surrender penalty can be recouped by other methods. Sometimes you have to take one step back to go two steps forward.

Royal & Sun Alliance decided to get these endowments off their books recently and transfered the endowments to a holding company called Pheonix Life & Pensions.

R&SA Life was sold to Pheonix Life.

Phoenix/ RSA have previously purchased annuity insurance cover , these annuities (52,000 of them) now represent a risk to future prosperity of Pheonix and they are going to sell them onto the Prudential group because they have decided to mitigate a number of risks they feel the annuity insurance causes them.

Quite a sensible move from Resolution Life Group. Although last I heard was that the final court hearing to see whether this would be allowed to proceed would not take place until 5th June 2006. Although I have been abroad for over week and have about 8 financial papers to read after I have caught up with my post!!!

Today I've received a letter from Phoenix to advise that all future bonuses are to be reduced by as much as upto 1.4% as a result of this sale to the Prudential Group.

Do they actually say that directly? That seems disgraceful. They are selling part of the book to Pru to reduce financial liability and improve the underlying financial strength of the company, which in theory should have a positive impact on bonuses.

just cannot believe this complete and utter farce that is being played out here, my wife and I have swallowed the fact that our original investment is to underperform what we have been advised by upto £18k and now we have a letter from some group to say we are going to be further impacted by upto 1.4% more

The projections are not advice and they are not accurate to what you will get back. They are just examples. The R&SA policies should be viewed at the lowest rate of the three projections and to be on the safe side, I would assume it to be lower than that as well. This probably means that you are looking at more than 18k as a shortfall.

I would appreciate any advice / views that anyone may have on this process as it strikes me that I'm not the only dumb schmuck that Royal & Sun Alliance must have conned over the last few years

R&SA have no connection with your policies any more so it is not them doing this. So, you cannot blame the "more than dog" for this mess (well actually you can if you think that selling up to a venture capital company was ever going to help the policy holders!). Resolution Life Group are in charge and their primary concern is to make money for the investors into the company. Not the policyholder. Sure, they have to do it within FSA rules but if you have a Resolution Life Group policy (of any sort), you should be straght off to your nearest IFA to get a full and proper review of it.

any idea how I find an IFA suitable for reviewing these facts ?

In theory any IFA is capable. Although like any service industry, you are going to get varying degrees of service. Often the best way is to look at www.unbiased.co.uk and do a postcode search. Do not select any qualification requirements (as that is highly flawed and rarely works) and see who comes up local to you. If the telephone number of the IFA is not a local telephone or the address is not local, then do not use them. These will usually be salesforce advisors and you dont want to be seeing anyone from a salesforce. You should get a better service from an "independent" IFA.

Hi Dave

Could you tell us what these endowments are invested in?

Are they in the With-profits fund?

Could you also post any maturity projections you have @4% growth please.

Thanks David

Are you sure that you've got the guaranteed sum assured/declared bonus figures correct?They appear to be higher than the projected maturity values which is pretty unlikely.