Should I surrender SL endowment

blythpower · 5 April 2009 at 2:54PM

First post so please be gentle!
I have a SL endowment due to mature in 2012. Recently received statement gives a curent value of £9483 and a total of £1030 premiums to pay to maturity with a guranteed minimum of £10567 at maturity.
We no loner have need of the policy to pay the mortgage off as this is already settled and the cash would be handy now otherwise we might have to cash in ISAs for cash we need in quite soon.
If it's best to get rid of the policy is it likely to be worthwhile getting aalue from one of the many re-sellers on the web or surender to SL.
thanks

mikeup · 18 April 2009 at 11:24AM

just had my stmt. from SL - and I am in very similar position - value had decreased by 10% since last year!!

my brain hurts..

Gorgeous_George · 18 April 2009 at 11:50AM

I'd surrender to SL - in fact, I did just that last year in anticipation of the cuts that you have experienced.

There is no guarantee that you will get a better price by selling and this will take longer than simply surrendering with a risk that they (SL) cut payouts again - leading to a poorer sale value.

The truth is, no-one can really know what is best. However, taking the decision to cash my policy in was, without doubt, a sound one. The danger is that having suffered the cuts, you think things will only get better. I don't think they will and it was a gamble that I wasn't prepared to take.

You have to decide yourself. I'm pleased that iI did.

I surrendered by phone and the money was in my account a week later.

GG

jubro · 18 April 2009 at 1:44PM

The answer to this is really how much risk you are prepared to be involved in.
Firstly get a surrender quote for your policy so that you know how much you will get for it. (It will be less than the value on your statement!)
Whilst asking for a surrender quote also ask what the value of the policy would be if you make it paid up. This means you stop making payments towards the policy, you may no longer have the life cover (check this whilst you are on the phone to them) and you wait until it matures to get the values. Most but not all companies continue to pay bonuses to the policy between now and maturity (again check this whilst you are on the phone!)
There isn't as much of a market in 2nd hand endowments but it is worth trying online to see if you can get an offer for yours (it doesn't take that long to find out if anybody is willing to make an offer - although the process of selling it may take a few weeks.)
You know have all the facts.
You can decide to take the risk and carry on paying the policy or surrender it or make it paid up or sell it?

I have recently done this and surprisingly I found that because I still need some of the life cover (which I can get elsewhere for less than £5 a month) I am better off to carry on paying the £40.89 a month as I get more than £36 a month added to the end value of my policy. (OK this is a bit simple and takes no account of possible interest but it is also possible the stock market could rally and my policy value might increase a little!)

dunstonh · 18 April 2009 at 2:28PM

value had decreased by 10% since last year!!

Thats not bad going at all then. I guess you were pleased with that given the exclamation marks.

EdInvestor · 18 April 2009 at 3:30PM

Almost certainly the value of the policy will continue to decline up to surrender and you will be best to take the cash now.

ashley · 18 April 2009 at 5:17PM

I have two endownments where I seem to be paying in more than I'm getting out. Should I cash these in and pay off part of mortgage. Then remortgage on interest only basis. I have had a small windfall which could also go towards mortgage.

opinions4u · 18 April 2009 at 5:48PM

ashley wrote: »

I have two endownments where I seem to be paying in more than I'm getting out. Should I cash these in and pay off part of mortgage.

It's an option, but depends on how the policies are performing at the moment, so unless you post more detail, nobody can help.

Then remortgage on interest only basis. I have had a small windfall which could also go towards mortgage.

Why interest only? Surely you should be looking to go on to a repayment mortgage in those circumstances.

EdInvestor · 18 April 2009 at 6:32PM

For a view on whether to surrender post the following info:

provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity forecasts
interest rate on mortgage

molerat · 18 April 2009 at 7:51PM

Just looked at my SL endowment, current surrender 11.7% down on last year plus they have another £773 of my money since then. Maturity value 16% down on last years. Don't need it for the mortgage any more so I think I'll pull the plug now. A bird in the hand as they say.

dunstonh · 18 April 2009 at 7:52PM

I have two endownments where I seem to be paying in more than I'm getting out.

You shouldnt be able to get anything out unless at maturity, death or early surrender. Are you sure its an endowment?

Then remortgage on interest only basis.

You wont find many lenders willing to lend on interest only basis without evidence of a repayment vehicle.

Should I surrender SL endowment

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