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Endowment or Savings Plan
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# 1
Old 27-11-2006, 2:20 PM
MoneySaving Newbie
Join Date: Nov 2006
Posts: 4
Default Endowment or Savings Plan

Hi can someone give me advice.

Last June I changed my Mortgage to a repayment mortgage with the Woolwich
10 year fixed for 10 years 4.67%. My old Mortgage was Interest Only with Endowments. I had two Endowments one of which I sold and the other is still running and with the money for the sold endowments I put it into home improvements. The Mortgage is 81,000 and I am paying 112 into the other endowment. Which is with Friends Provident with profits.It has another 10 years or so to run. The Mortgage has 19 years to go. I was thinks of keeping the old endowment running and hopefully be able to pay of the rest of the repayment mortgage or some of it ,depending on the performance of the endowment in, in in 10yrs time.

Would anyone have any better suggestions or is this a good idea. That is if the endowment improves . Its was due to pay out 45,000 but has shortfalls. I think the last time I looked , if investments run at 4% I would only receive 28,000 would have to double check it again.

Thanks for reading:confused:
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# 2
Old 27-11-2006, 3:32 PM
Mega Magnificent Maxi-Meticulous Uber-MoneySaving Magnate
Join Date: Apr 2004
Location: Norfolk
Posts: 76,766

Being FP with profits, I would be looking at the 4% figure as a realistic projection and then knock off 10% to be on the safe side (more likely).

Its not a very good fund option and I would investigate early surrender and paid up options to compare against keeping it running.
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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# 3
Old 27-11-2006, 4:39 PM
Deliciously Dedicated Doubly Diehard MoneySaving Devotee
Join Date: Sep 2004
Posts: 15,682

At a nmortgage interest rate of 4.67% you will probably get a better return if you surrender it and use the money to reduce the outstanding loan and overpay t by increasing the monthly payment by the amount of the endowment premium.
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# 4
Old 28-11-2006, 3:50 PM
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Join Date: Nov 2006
Posts: 4

Thanks for the reply's
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