AXA Cashbuilder Plus

This is one of those horrible "Carol Smilie" monthly savings plans?   also known as endowments

These products are only available if bought direct and not through advice channels.  Mainly as no advisor would dream of recommending one but its your own fault if you buy one (therefore you cant complain or get compensation)

Advertising makes these look great. So great that the FSA fined AXA £500,000 in December.  It is probably why their website is down at present.

The plan is a with profits low start endowment assurance.    Low start endowments are the devils spawn.  These were the worst type of endowment you could get.  They cost more over the term than a level endowment and you get back less due to increased charges.

Anyone who took out a cashbuilder plus policies between 2002 and April 2003 can cancel their plans and get a refund of contributions plus interest.    I know this doesnt apply to you but anyone else reading it who took it out in that period, should really consider acting on this.

You may have heard of reason why letters.  Here is a reason why not on this type of plan:

The older you are, the lower the amount you are likely to get back.

Using AXAs own literature, a 32 year old male saving £10pm at the start increasing by £2 each year  would pay in £3250 over 15 years.   at 4%pa you would get back £3540, 6% = 3980, 8% = £4480.  

Fund potential is around 4%.  A cash isa paying 4% a year would grown to £4345.63 over 15 years

Reduction in yield is 3.1%, excluding cost of life cover.  This means that if the first 3.1% goes in charges.  You only get profit if you grow above 3.1%  and that is ignoring the cost of the life cover.  That would impact on that further.

The bonus rates are currently below 3.1%.

The plan itself is no better or worse than any other of this style offered by a very small number of insurance companies.   I just hate it more because I feel the advertising gives the impression you will get big amounts which are totaly unrealistic and is more likely to give a negative return and is still being sold even though most providers killed their equivalent versions of this product years ago.  

As for whether you should surrender or make paid up your plan,  I cannot say as I do not have enough information about your plan.    You need to find out what the current and surrender value are.  You can then work out how much you have paid in and how much you have lost.    Then you can decide if you will gain more over the remaining term by looking at other products, such as Cash ISAs.