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Endowment payouts set to fall 20%

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EdInvestor
EdInvestor Posts: 15,749 Forumite
in Mortgages & endowments
Following market losses in equities, bonds and property.

FT report
Trying to keep it simple...;)

Comments

  • Gorgeous_George
    Gorgeous_George Posts: 7,964 Forumite
    Part of the Furniture Combo Breaker
    Surrender now!

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • stulaunch
    stulaunch Posts: 560 Forumite
    Part of the Furniture 100 Posts
    I got a surrender value 4 weeks ago from Prudential (Scottish Amicable)

    I didn't get round to surrendering at the time, wish i had done now.

    If i get a new surrender value on Monday, do you think recent market conditions will have reduced value much already? Or do these things take a while to come through?

    How quick does one have to be to protect current values?
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    I assume some market value adjustments for surrender will be introduced / increased.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    Earlier thread starting in July here :

    http://forums.moneysavingexpert.com/showthread.html?t=1057811

    We've seen cuts ITRO 10% so far. There is a 'time lag' with WP investments between market falls/rises and their effect on policy values but it varies with each insurer..
    Trying to keep it simple...;)
  • dunstonh
    dunstonh Posts: 119,710 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I got a surrender value 4 weeks ago from Prudential (Scottish Amicable)

    I didn't get round to surrendering at the time, wish i had done now.

    Why? October statements have shown Pru valuations to be up on October last year. Pru have chosen to introduce MVRs rather than reduce bonuses.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • pmcx9
    pmcx9 Posts: 169 Forumite
    Sorry to hijack a thread but..................
    I have almost certainly sold my house (finally after nearly a year!) and plan to rent for a while, hopefully returning to buy without a mortgage when the market is right.
    I have 2 Norwich Unions endowments (both non with profit @£85per month) that are 15 years old and got a dismal surrender value last week (under £16k) which is about the amount I have paid in.
    I am going to stop making the monthly contributions but should I actually cash them in and take the money and run?
    I have asked this same question last year when anticipating selling my house but wondered if I would get the same advice now knowing what has occurred in the last few months!
    thanks
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    Legal and General also cuts payouts

    http://www.telegraph.co.uk/finance/personalfinance/savings/3240263/With-profits-Legal-and-General-cuts-bonus-rates-on-with-profits-policies-by-up-to-9-per-cent.html
    Trying to keep it simple...;)
  • millpond_2
    millpond_2 Posts: 13 Forumite
    We started with our first mortgage in 1968 with an endowment policy with L&G, in 1984 we moved house but still had the endowment policy.
    The 1984 mortgage (£18,000) is a 25 year one, so in August 2009 we finish the payments. In light of the latest news regarding L&G cutting payouts, is it, at this stage, an option to cash the endowment policy, or just hang on until 2009 and see what happens.
    In the annual statements that L&G send they always say it ''should'' make the final figure, a far cry from 1968 when we were told that a large LUMP SUM would be payable to us on top of paying the mortgage, its going to go full circle and its us that are going to be paying the lump sums. Thanks!
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    millpond wrote: »
    The 1984 mortgage (£18,000) is a 25 year one, so in August 2009 we finish the payments. In light of the latest news regarding L&G cutting payouts, is it, at this stage, an option to cash the endowment policy

    Yes. At this point they don't seem to have imposed a surrender penalty (MVR) so if you move fast......
    , or just hang on until 2009 and see what happens.

    It seems pretty obvious what's going to happen.
    Trying to keep it simple...;)
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