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    • Arkers
    • By Arkers 15th Jul 16, 2:04 PM
    • 557Posts
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    Arkers
    Mortgage Endowment Promise (MEP)
    • #1
    • 15th Jul 16, 2:04 PM
    Mortgage Endowment Promise (MEP) 15th Jul 16 at 2:04 PM
    Just a quick question for those who may know. I have two endowments due to mature in 2018 and 2019. Both with different companies (Aviva - originally General Accident, and Standard Life). Both of these discuss in the literature a MEP. The amounts payable are estimated it could be a higher then the cited figure lower than, or nothing at all. Well at least for Standard Life. The GA figure appears to be a lot more in terms of the promised amount then S.Life yet the endowment is less.


    Do these MEP pay out? and if so, is it the higher amount or lower amount?


    I find these promises a bit vague, so wondered if anyone could shed some light on it all for me.


    Thanks


    Arkers
Page 1
    • dunstonh
    • By dunstonh 15th Jul 16, 4:01 PM
    • 88,303 Posts
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    dunstonh
    • #2
    • 15th Jul 16, 4:01 PM
    • #2
    • 15th Jul 16, 4:01 PM
    Do these MEP pay out?
    Yes

    and if so, is it the higher amount or lower amount?
    It depends on the rate of return.

    I find these promises a bit vague, so wondered if anyone could shed some light on it all for me.
    They are quite straightforward but in simple terms, there is a maximum that will pay out with Aviva and Std Life. This results in a range being given of what it could be. However, it is not possible to know what it would be until you get to maturity.

    So, the promise is not vague. The process is defined. Its just that you cant know the actual figure until maturity. Just a rough guide.
    I am an Independent Financial Adviser (IFA). 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.
    • elmer
    • By elmer 15th Jul 16, 5:55 PM
    • 758 Posts
    • 826 Thanks
    elmer
    • #3
    • 15th Jul 16, 5:55 PM
    • #3
    • 15th Jul 16, 5:55 PM
    My MEP with Standard life added 20% to our final value in May, we still were £8000 short, but had budgeted for it since 2000 so the mortgage is paid off.

    SL gave us a final figure a month before, but only a range for the MEP, we had to wait for the plan to end to see how much was added.

    elmer
    • timrowlands
    • By timrowlands 16th Jul 16, 1:17 PM
    • 3 Posts
    • 1 Thanks
    timrowlands
    • #4
    • 16th Jul 16, 1:17 PM
    • #4
    • 16th Jul 16, 1:17 PM
    My MEP with Standard life added 20% to our final value in May, we still were £8000 short, but had budgeted for it since 2000 so the mortgage is paid off.

    SL gave us a final figure a month before, but only a range for the MEP, we had to wait for the plan to end to see how much was added.

    elmer
    Originally posted by elmer
    I have a Standard Life Homeplan due to mature in March 2019. It was taken out for 25 years with a target amount of £41,000. Monthly premium is just under £60. Mine is invested 50/50 in Unitised with profit / Managed, so I do qualify for MEP.

    I am also curious as to how much this MEP may be. Current surrender value online shows as just over £25000, including terminal bonus of around £4000. With another £2000 of premiums and some modest growth, it should be worth around £30000 at maturity. I'd be very happy to get 20% of this added at the end. By the time the demutualisation shares (which I still hold) plus dividends are factored in, it won't be that far short of the target amount.

    Elmer, how did your MEP compare to the range that you were quoted on your annual statement?
    • elmer
    • By elmer 17th Jul 16, 11:46 AM
    • 758 Posts
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    elmer
    • #5
    • 17th Jul 16, 11:46 AM
    • #5
    • 17th Jul 16, 11:46 AM
    Eek, a technical question, I'm sorry, i don't know, they put my statements on line a few years ago, and I was unable to access them after that.

    I did discuss the whole issue including the MEP with a standard life advisor 3 years ago, who wouldn't commit to anything, but gave me an indication that £20, 000 including the MEP was a likely figure, and we received £20 800, so she wasn't far out.

    I called them again in April and they gave me a range of 2400 to 3200 for the MEP, and we received just over £3000, so towards the top of the range they told me.

    We used the extra £800 for a holiday and as our mortgage is finished I was happy, even though it was £8000 short on their predictions 25 years ago

    sorry I can't help with the statements

    elmer
    • cazscash
    • By cazscash 1st Jun 17, 7:51 AM
    • 6 Posts
    • 32 Thanks
    cazscash
    • #6
    • 1st Jun 17, 7:51 AM
    • #6
    • 1st Jun 17, 7:51 AM
    Ive been reading a lot of threads myself and trying to work out my MEP for a Standard Life Endowment due this month. Some have been paying out at about 60-65% of the shortfall, but in most cases they are understating this on the prediction statement.
    I am counting the days to payout and will post details next week. Thankfully mortgage cleared a number of years ago after taking action.
    Dunstonh, have appreciated your many comments on other threads relating to Endowment payouts.
    Hopefully my figures will help others in trying to predict final payout.
    • dunstonh
    • By dunstonh 1st Jun 17, 9:45 AM
    • 88,303 Posts
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    dunstonh
    • #7
    • 1st Jun 17, 9:45 AM
    • #7
    • 1st Jun 17, 9:45 AM
    Some have been paying out at about 60-65% of the shortfall, but in most cases they are understating this on the prediction statement.
    The statements are not a prediction and should not be considered as such. They are projections using a range of assumptions. Those assumptions may or may not be reasonable assumptions. Some endowment projections use assumptions way below the likely outcome. For example, the projection percentage is before charges. So, if you have a 2.5% growth rate, it does not mean 2.5% net. it means 2.5% before charges. So, if charges were, say, 1.5% and your plan has been averaging 4% growth a year then a projection rate to match that would be around 5.5%

    Std Life do tell the servicing IFA what the MEP range is for any plan that is on their agency. So, if you have your plan on the agency of an IFA, you could ask them to find out for you.
    I am an Independent Financial Adviser (IFA). 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.
    • cazscash
    • By cazscash 1st Jun 17, 11:27 AM
    • 6 Posts
    • 32 Thanks
    cazscash
    • #8
    • 1st Jun 17, 11:27 AM
    25 year Standard Life Endowment maturing this month.
    • #8
    • 1st Jun 17, 11:27 AM
    Thanks Dunstonh, some of that a bit over my head. No IFA involved so no charges that I'm aware of, hopefully money hitting the bank in the next few days. Standard Life have sent out maturity value without MEP calculation, this should have been done yesterday
    Last edited by cazscash; 01-06-2017 at 6:05 PM. Reason: Should have read without MEP calculation
    • dunstonh
    • By dunstonh 1st Jun 17, 11:40 AM
    • 88,303 Posts
    • 53,529 Thanks
    dunstonh
    • #9
    • 1st Jun 17, 11:40 AM
    • #9
    • 1st Jun 17, 11:40 AM
    No IFA involved so no charges that I'm aware of
    The plan has built in charges. These would be from the days before explicit disclosure but they are there. It doesnt matter if you had an IFA or it was bought direct from SL.

    The key thing is that when the projection gives a growth rate of x%, it doesnt really mean a net growth rate of that amount. i.e. if growth rate is 4.4% on the projection that its likely to be closer to 2.9% growth.
    I am an Independent Financial Adviser (IFA). 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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