Standard life endowments cash in question

quanto2009 · 4 September 2009 at 1:57PM

These are not attached to mortgage now was using as a saving plan ,now out of work and trying to cut back are they worth keeping?

With profits started 1990
Sum assurrred £10780 £35000 on death
bonus to date £5400
Surrender value £11671.21
Monthley prem £42.30
Matures 2016
3.75% £16200
5.5% £18000
7.25% £21000

Unitised plan
started 1997 #
Matures 2022
Target amount £50000
Premium £109 per month
plan grows lower rate £26000
Mid rates £33000
High rates £42000

Surrender value £12859

EdInvestor · 4 September 2009 at 2:03PM

What would you do with the money if you surrendered - ie what interest rate/return would you expect to get?If you still have a mortgage, what interest rate are you paying?

dunstonh · 4 September 2009 at 2:31PM

In additon to what Ed has asked, what is the mortgage promise value range on those plans?

What investment funds are you using with the unitised plan?
What are the projection rates used with the unitied plan (Std Life mix and match depending on the fund so saying low/mid/high doesnt help)

quanto2009 · 4 September 2009 at 3:16PM

The unitised plan is in managed fund and life with profits fund

The with profits plan has a MEP of between £2400 and £3600

Moved house had a repayment started in 2000
Fixed for 5yrs @ 5.3% beginning 2008 oustanding £43000.
Was overpaying approx £100 per month

quanto2009 · 4 September 2009 at 7:13PM

Sorry I forgot would use the money to try and overpay on the mortgage and save some for emergency fund
Thanks

quanto2009 · 5 September 2009 at 11:53AM

Any one with any opinions please

Thanks

quanto2009 · 5 September 2009 at 4:07PM

Any thoughts anyone?
Thanks Quanto

EdInvestor · 5 September 2009 at 4:45PM

quanto2009 wrote: »

3.75% £16200
5.5% £18000
7.25% £21000

If you cashed in policy one now and used the lump sum to reduce the mortgage, also adding the premium to the mortgage payment up till maturity , your return would be £21.013. This beats their top forecast and with no risk.The MEP is not guaranteed.

Mid rates £33000
High rates £42000

If you also proceeded as above with the second policy at maturity your return would be £49,452 which is an even bigger incentive to consign these endowments to the past.

Replace any needed life cover before surrendering.

quanto2009 · 7 September 2009 at 8:49AM

Thanks Edinvestor
Can you tell me the difference between the with profits and unitised plan is one better than the other or is more cash for the person who sold me the product?

quanto

Bluebower · 7 September 2009 at 9:59AM

I also have SL endowment with very similar figures to the OP, I had decided to cash it in and invest elsewhere, the only thing putting me off is the mortgage endowment promise, how do you find out the value of this?

EdInvestor · 7 September 2009 at 10:34AM

quanto2009 wrote: »

Thanks Edinvestor
Can you tell me the difference between the with profits and unitised plan is one better than the other or is more cash for the person who sold me the product?

quanto

The big difference is the conventional WP policy has a guaranteed value at maturity.The unitised plan will be more volatile but has more potential for growth.However if the money was in unit linked funds in an ISA it would have even more potential as a better fund choice would be available and the gains would not be taxed as they are in the endowment.You would also not be paying for (unnecessary?) life cover..

Standard life endowments cash in question

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