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  • FIRST POST
    • oops a daisy
    • By oops a daisy 22nd Jun 07, 10:54 PM
    • 2,427Posts
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    oops a daisy
    should I sell my endowment ?
    • #1
    • 22nd Jun 07, 10:54 PM
    should I sell my endowment ? 22nd Jun 07 at 10:54 PM
    I know this gets asked a lot on here but I would really like somebody with a bit more knowledge on the subject to look at my figures for me please. My endowment details are as follows
    start date 29.08.91 maturity date 29.08.16 so has 9 years to go
    basic sum assured 17193.00 attaching bonuses 7292.00
    monthly premiums 73.74
    The surrender value offered from L & G is 19248.70
    highest offer from APMM is 20698.00
    My mortgage details are as follows
    Interest only balance owing 33765.00 ( original mortgage was for 55k but have made unrestricted overpayments due to redundancy payout, savings, small inheritence and monthly overpayments of what ever I can make )
    Mortgage taken out on a tracker at a small % above BOE rate in October of last year fixed for 5 years current rate 5.84%.
    OK so my thinking is that if I surrender my endowment I will be 'saving' the monthly premiums of 73.74 per month and 'saving' interest payments on 20698 ( approx 100 per month ) so total 'saving' would be 174 per month approx. I would be left with a mortgage balance of 13067 which ideally I would like to pay off before the 5 year fixed rate ends.
    Basically I would like to know if the offer that has been made by the APMM member is a fair offer - seems good to me but I have no experience in these matters. I think I would be better off doing the above as having a mortgage of about 13k would leave me at much less of a risk to increased interest rates. Also I have not actually got another job yet and think that I would be protecting my 'savings' by paying off my mortgage with them should I not get another job soon.
    Am I thinking along the right lines :confused:
    Thanks for reading
    Official DFW Nerd Club Member #37 Debt free Feb 07
Page 1
  • EdInvestor
    • #2
    • 22nd Jun 07, 11:13 PM
    • #2
    • 22nd Jun 07, 11:13 PM
    Provide some maturity forecasts from L&G and then we can work out if you will beat them by using the money instead to reduce the mortgage.
    • oops a daisy
    • By oops a daisy 22nd Jun 07, 11:15 PM
    • 2,427 Posts
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    oops a daisy
    • #3
    • 22nd Jun 07, 11:15 PM
    • #3
    • 22nd Jun 07, 11:15 PM
    ah sorry I dont have them ( and there was me thinking I had all my facts & figures ready before I posted ) I will give L & G a ring and see what they say. Thanks for replying
    Official DFW Nerd Club Member #37 Debt free Feb 07
  • dunstonh
    • #4
    • 23rd Jun 07, 1:20 AM
    • #4
    • 23rd Jun 07, 1:20 AM
    We also need to know the current terminal bonus that is accrued on the plan.
    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.
    • oops a daisy
    • By oops a daisy 23rd Jun 07, 2:44 PM
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    oops a daisy
    • #5
    • 23rd Jun 07, 2:44 PM
    • #5
    • 23rd Jun 07, 2:44 PM
    We also need to know the current terminal bonus that is accrued on the plan.
    Originally posted by dunstonh
    that one is easy - 56K
    2 lives assured ( mine & my ex )
    endowment is assigned to moi

    now I have answered that question I am not sure I have understood the question - is that right :confused:
    Official DFW Nerd Club Member #37 Debt free Feb 07
  • dunstonh
    • #6
    • 23rd Jun 07, 3:15 PM
    • #6
    • 23rd Jun 07, 3:15 PM
    56k isnt the terminal bonus. Wish it was but it isnt.

    Many companies do not tell you the terminal bonus unless you ask for it. Some dont even show it on statements. The terminal bonus is where the bulk of the return is likely to be.
    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.
  • EdInvestor
    • #7
    • 23rd Jun 07, 4:07 PM
    • #7
    • 23rd Jun 07, 4:07 PM
    An endowment's maturity value is based on the total of the guaranteed value and the terminal bonus (aka the unguaranteed value).

    basic sum assured £17193.00 attaching bonuses £7292.00
    Add these two together to get the guaranteed value at the moment - this will increase a bit as extra guaranteed bonuses are attached every year - but these bonuses tend to be pretty low these days.

    The surrender value offered from L & G is £19248.70
    The surrender value contains a combination of a proportion of the guaranteed value accrued so far (the full amount is only payable at the end) and the terminal bonus accrued so far.

    You should be able to find out what proportion of the surrender value the TB makes up. Sadly, not a lot these days.

    The 56k you mention is the target the endowment was supposed to raise to pay off the mortgage: it would only be paid out if you died before maturity.
  • Gorgeous George
    • #8
    • 23rd Jun 07, 4:10 PM
    • #8
    • 23rd Jun 07, 4:10 PM
    The 56k you mention is the target the endowment was supposed to raise to pay off the mortgage: it would only be paid out if you died before maturity.
    Originally posted by EdInvestor
    ... but that's not the terminal bonus - not even if it's the ex who is terminated.



    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
    • oops a daisy
    • By oops a daisy 23rd Jun 07, 6:56 PM
    • 2,427 Posts
    • 3,467 Thanks
    oops a daisy
    • #9
    • 23rd Jun 07, 6:56 PM
    • #9
    • 23rd Jun 07, 6:56 PM
    ... but that's not the terminal bonus - not even if it's the ex who is terminated.



    GG
    Originally posted by Gorgeous George
    now theres wishful thinking but Im over that now

    sorry I did wonder if I had the right amount when I was writing it. I am having phone problems this weekend so when I get a landline again I will give L & G a ring and find out the rest of the info.

    Have a great weekend - OOPS
    Official DFW Nerd Club Member #37 Debt free Feb 07
    • oops a daisy
    • By oops a daisy 26th Jun 07, 2:47 PM
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    oops a daisy
    Provide some maturity forecasts from L&G and then we can work out if you will beat them by using the money instead to reduce the mortgage.
    Originally posted by EdInvestor
    ok then in reply to the above, L & G are having to work it our manually and will be putting this information in the post to me in the next 10 days

    and in reply to the question about the terminal bonus, it is currently 90% of the existing bonus of £7292.50 so I make that a terminal bonus of £6563.25


    sorry I cant get all of the information required straight away so I will have to resurrect this thread when all of the information comes through


    edited to add - what will Northern Rock want me to do if I do go down the route of selling the policy and paying off a chunk of my mortgage - will they just want me to take out some sort of life insurance ?
    Last edited by oops a daisy; 26-06-2007 at 2:51 PM.
    Official DFW Nerd Club Member #37 Debt free Feb 07
    • oops a daisy
    • By oops a daisy 3rd Jul 07, 1:35 PM
    • 2,427 Posts
    • 3,467 Thanks
    oops a daisy
    I have just received the information from L & G however they have stated that a mortgage savings plan that I took out years ago to top up the initial endowment is included in the figures ( I thought it was seperate as the payments are taken seperately and they send seperate statements ). If it is of any use, L & G have also stated that the endowment is still on amber alert even with the mortgage top up plan to pay out the targetted amount.

    so the projected final amount at 4% each year is 45,800 10,200 shortfall
    the projected final amount at 6% each year is 53,500 2700 shortfall
    and the projected final amount at 8% each year is 62,000 6000 surplus

    the monthly premium that I pay into the mortgage savings plan is 41.21 on top of the endowment payment.

    thanks for all of your help
    Official DFW Nerd Club Member #37 Debt free Feb 07
  • EdInvestor
    Please provide the following info for both plans (either separately or combined together)


    Guaranteed sum assured
    Declared bonuses
    Surrender value
    Monthly premium
    Maturity date
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