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Phoenix Life & Pensions - Endowment Policies
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# 1
Big_Dave
Old 06-04-2006, 11:43 PM
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Angry Phoenix Life & Pensions - Endowment Policies

Hi

In the past my wife and I have purchased 3 endowment policies via Royal & Sun Alliance to cover the purchase properties previously.

Having been advised that these policies were going to under perform to somewhere in the region of 18k We made provision to cover this shortfall in other ways (and also recovered some monies for the mis-selling of the endowment to me and my wife ).

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.

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

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.

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.

I 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 !!

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

I look forward to any views

Regards
Dave
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# 2
vinno65
Old 07-04-2006, 8:48 AM
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Hi Big_Dave,

Conned by a reputable life company?. Surely not. These people are here to help you and only have your best interests at heart!
I'll quote Johhny Rotten at the Sex Pistols last gig."do you ever feel you've been had"
regards Vinno
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# 3
dunstonh
Old 07-04-2006, 9:43 AM
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Quote:

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.

Quote:
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.

Quote:
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!!!

Quote:
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.

Quote:
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.

Quote:
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.
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 4
EdInvestor
Old 07-04-2006, 10:26 AM
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Quote:
They are selling part of the book to Pru to reduce financial liability and improve the underlying financial strength of the company...

Unfortunately this usually means you have to pay the buyer to take the liability away.

Post some info about your policies and let's have a look:

Guaranteed sum assured
Declared bonuses
Surrender value (ring up)
Monthly payment
Maturity date
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# 5
Big_Dave
Old 07-04-2006, 4:06 PM
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Quote:
Originally Posted by vinno65
Hi Big_Dave,

Conned by a reputable life company?. Surely not. These people are here to help you and only have your best interests at heart!
I'll quote Johhny Rotten at the Sex Pistols last gig."do you ever feel you've been had"
regards Vinno
Thanks for the supportive comments vinno ..... and yes I've been feeling like I've been had for a number of years now .... but kept on hoping it might get better .... it looks like I'd have been aswell forgetting about them ages ago!!
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# 6
Big_Dave
Old 07-04-2006, 4:19 PM
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Quote:
Originally Posted by dunstonh

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.
Yes the letter says....

"the reinsurance has had an effect on with profits policies . This is because the amount we paid to the Prudential Group exceeded our reserves for the annuities in question. This has reduced our profits for 2005. In turn this will result in a reduction in future bonuses "what bonuses" :confused: that will reduce payouts, in many cases by up to 1.4%"

Good business for Phoenix .... very poor business for its policy holders!!

Quote:
Originally Posted by dunstonh
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.
Yes - I've viewed it at the lowest projected rate

Quote:
Originally Posted by dunstonh
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.
I may just do that in the near future ... any idea how I find an IFA suitable for reviewing these facts ?

Thanks for your views Dunstonh
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# 7
dunstonh
Old 07-04-2006, 4:53 PM
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Quote:
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.
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 8
Big_Dave
Old 07-04-2006, 4:57 PM
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Quote:
Originally Posted by EdInvestor
Unfortunately this usually means you have to pay the buyer to take the liability away.

Post some info about your policies and let's have a look:
Hi EdInvestor

We purchased 3 endowment policies via RSA / Phoenix

Guaranteed sum assured
Policy 1 = 16k
Policy 2 = 16k
Policy 3 = 30k
Declared bonuses (Last Bonus statement was for 2004 , 2005 has been delayed)
Policy 1 = 1,234.81
Policy 2 = 1,234.81
Policy 3 = 1,037.91
Surrender value (ring up)
Policy 1 = 3,600
Policy 2 = 3,600
Policy 3 = 5,000
Monthly payment
Policy 1 = 31.04
Policy 2 = 32.35
Policy 3 = 73.81
Maturity date
Policy 1 = 01/02/2020
Policy 2 = 01/02/2020
Policy 3 = 01/04/2020
Having paid in 15k into these policies already like many others I feel pretty hacked off with the whole state of affairs.

If I continue to the end of term thats another 22/23k for a return of 3.5% return .... I start to think my money is better off else where like in my offset account or in a maxi isa invested in a good performing fund rather than this set of ... at best incompetent planks ... at worst con merchants (I could use stronger language ) !!

Any help greatly appreciated

Regards
Dave
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# 9
EdInvestor
Old 07-04-2006, 6:23 PM
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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.

Last edited by EdInvestor; 07-04-2006 at 6:25 PM.
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# 10
Big_Dave
Old 07-04-2006, 6:47 PM
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Hi Ed

Quote:
Originally Posted by EdInvestor
Hi Dave

Could you tell us what these endowments are invested in?
I believe they are invested in the "with profits fund" how would I find out?

I'm unable to see anywhere on the paperwork where the funds are invested?

The policy is the Homeplan Endowment from RSA and states all over paperwork that Homeplan is a "with-profits" plan


Quote:
Originally Posted by EdInvestor
Could you also post any maturity projections you have @4% growth please.
Projections are quoted as 3.75% / 4.5% / 5.25%
Policy 1 11,000 / 11,900 / 12,800
Policy 2 11,000 / 11,900 / 12,800
Policy 3 21,300 / 22,800 / 24,500
Thanks
David
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# 11
EdInvestor
Old 07-04-2006, 7:31 PM
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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.
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# 12
Big_Dave
Old 08-04-2006, 10:22 AM
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Quote:
Originally Posted by EdInvestor
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.
Hi Ed

Nope not really that sure .... I'll quote the phrases from the last statement 2004
Policy 1
Guaranteed Min Death Benefit = 16k
Maturity Date = 17/02/2020
Amount on which basic bonus is calculated = 7260
Bonus Earned To 31.12.2003 = 1213.63
New Bonus Added This Year = 21.18
Total Bonus Earned To 31.12.2004 = 1234.81

Policy 2
Guaranteed Min Death Benefit = 16k
Maturity Date = 17/02/2020
Amount on which basic bonus is calculated = 7260
Bonus Earned To 31.12.2003 = 1213.63
New Bonus Added This Year = 21.18
Total Bonus Earned To 31.12.2004 = 1234.81

Policy 3

Guaranteed Min Death Benefit = 30k
Maturity Date = 27/03/2020
Amount on which basic bonus is calculated = 15123
Bonus Earned To 31.12.2003 = 997.61
New Bonus Added This Year = 40.30
Total Bonus Earned To 31.12.2004 = 1037.91

Any help greatly appreciated

Rate of annual bonus was declared @ 0.25%

Regards
Dave
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# 13
EdInvestor
Old 08-04-2006, 11:34 AM
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Quote:
Originally Posted by Big_Dave
Hi Ed

Policy 1
Amount on which basic bonus is calculated = 7260
Total Bonus Earned To 31.12.2004 = 1234.81

Policy 2
Amount on which basic bonus is calculated = 7260
Total Bonus Earned To 31.12.2004 = 1234.81

Policy 3

Amount on which basic bonus is calculated = 15123
Total Bonus Earned To 31.12.2004 = 1037.91


Thanks Dave,

The guaranteed value is made up the two figures I've highlighted above, so it's 8,494 for the two smaller ones and 16,160 for the bigger one.These amounts are what you will deinitiely get at maturity, and it's unlikely you'll get much more in this zombie fund .

So let's compare what would happen if you cashed in these policies and put them on deposit @4% until maturity, also paying in the premiums.

The smaller policies would get to 13,409
The larger policy would get to 25,251.

These figures are not only much higher than the guaranteed value, they are also higher than the highest projected value.

So you'd be well ahead if you cash in, with an even higher risk-free return likely if you use the money to reduce the mortgage, depending on what interest rate you're paying on that. If you need to replace the life cover be sure to do it before surrendering the endowments.

Last edited by EdInvestor; 08-04-2006 at 11:37 AM.
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# 14
Big_Dave
Old 08-04-2006, 12:59 PM
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Quote:
Originally Posted by EdInvestor
Thanks Dave,

So you'd be well ahead if you cash in, with an even higher risk-free return likely if you use the money to reduce the mortgage, depending on what interest rate you're paying on that. If you need to replace the life cover be sure to do it before surrendering the endowments.
Hi Ed

Thanks for the analysis of the situation I really appreciate it

I've got an offset via the woolwich at 5.35% so the savings will be higher - looks like I'll be better off getting shot of the endowment

I've heard it is possible to trade with profits endowments. Where am I likely to get the best price any ideas?

Regards
David
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# 15
ReportInvestor
Old 08-04-2006, 1:47 PM
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Traded endowment policies are largely traded because of the potential of & variation on the terminal bonus.

I can't imagine anyone trades Phoenix policies because a TB is unlikely.
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# 16
weaver
Old 08-04-2006, 2:55 PM
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I cashed in my Phoenix policy and got the money 2 weeks ago. No one would buy them, so I had no option but to go with phoenix.

I lost 700 by having to do this (the best quote until they realised they were phoenix )

I sent them a utility bill and bank details as I had lost the original policies.

Ive put money into ISAs as my mortgage deal ends in october, I will re-negotiate a better deal and possibly pay off the money or leave in the ISAs which ever is the best deal at the time.

I feel more settled by doing this, Im no longer dreading the letter saying the shortfall has got bigger each year, at least Im getting some interest on my money and will make further decisions in october.

Hope this helps
Thanks to everyone who posts comps
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# 17
EdInvestor
Old 08-04-2006, 6:22 PM
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I'm afraid no chance of selling Royal policies, you'll have to surrender.
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# 18
Big_Dave
Old 09-04-2006, 9:55 AM
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Quote:
Originally Posted by EdInvestor
I'm afraid no chance of selling Royal policies, you'll have to surrender.
Oh well doesn't hurt to ask ....

Well it looks like I'm going to surrender these useless things and hold the cash in my offset account account.

How niave of me to expect an investment company to attempt to get some performance out of the money I gave them in order to get a return .... in the end it's all about the fees they could charge for the endowment ... ok I know ... businesses are run for the shareholders benefit not the customers !! Sorry for the rant

Thank you for all your help

Regards
David
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# 19
Big_Dave
Old 09-04-2006, 10:07 AM
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Quote:
Originally Posted by weaver
I cashed in my Phoenix policy and got the money 2 weeks ago. No one would buy them, so I had no option but to go with phoenix.
Looks like I'm going to be following you

Quote:
Originally Posted by weaver
I sent them a utility bill and bank details as I had lost the original policies.
I'm not sure if I still have the original policies either ... I'd better right them a letter telling them what a useless shower they are and surrender the policy.

Quote:
Originally Posted by weaver
Ive put money into ISAs as my mortgage deal ends in october, I will re-negotiate a better deal and possibly pay off the money or leave in the ISAs which ever is the best deal at the time.
I'm thinking of putting some into the Offset and some into an Maxi ISA fund

Quote:
Originally Posted by weaver
I feel more settled by doing this, Im no longer dreading the letter saying the shortfall has got bigger each year, at least Im getting some interest on my money and will make further decisions in october.

Hope this helps
I know the feeling, the last letter (as described earlier) from Phoenix sent my heart rate up , it took me ages to calm down enough hence the posting on this chat forum ... didn't realise I felt such high levels of anger towards the Endowent Companies until I got the latest letter in .... and thought "They're taking the p*ss out of me now!!!!"

So all round I think your right we're better off without the stress and strain that each of these letters causes us

Ta
David
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# 20
eviegem
Old 23-04-2008, 8:23 AM
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Post Phoenix Endowment Policy

I too have a Phoenix endowment policy and you recently gave this advice to another poor soul!!!!

My endowment expires 2010 it is for 30,000. These are the details:
Basic guaranteed sum assured 9360
Previous bonuses 9280.95
This year's bonus (the princely sum of 46.60!!!)
Total plan benefits 9327.55

1. Does this mean the total value at present is approx 18,600? (obviously we only get that sum towards the 30,000 if we see it throught to the bitter end)?

2. Would you give us the same advice and how do we go about it?

Ta a lot!!!






Quote:
Originally Posted by EdInvestor View Post
Thanks Dave,

The guaranteed value is made up the two figures I've highlighted above, so it's 8,494 for the two smaller ones and 16,160 for the bigger one.These amounts are what you will deinitiely get at maturity, and it's unlikely you'll get much more in this zombie fund .

So let's compare what would happen if you cashed in these policies and put them on deposit @4% until maturity, also paying in the premiums.

The smaller policies would get to 13,409
The larger policy would get to 25,251.

These figures are not only much higher than the guaranteed value, they are also higher than the highest projected value.

So you'd be well ahead if you cash in, with an even higher risk-free return likely if you use the money to reduce the mortgage, depending on what interest rate you're paying on that. If you need to replace the life cover be sure to do it before surrendering the endowments.
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