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Endowment - Cash in or Keep it going ??

wannabemoneysaver
Posts: 27 Forumite

Can any of you kind , learned people give me some advice as to whether I should cash in my endowment or keep going with it? I've read similar posts on here so I think I know what info I need to post, so here goes :
£111,000 o/s mortgage on life time tracker (0.24% over bank of England base) left on mortgage. Nominally 17 years left on it (I'll probably try to pay this off in about 10 yrs, God willing.)
Originally endowment was for £42K, but because it looked iffy, I converted £12K to repayment, so now I have about £81K repayment and £30K endowment.
Endowment was originally taken out in Dec 1995 with Royal and Sun Alliance. It was a Low-start type. Now in the hands of the Phoenix group.
I am paying £100 per month.
Surrender value obtained this week is : £15354.00
"Guaranteed Death Benefit" : £42000. (Largely irrelevant, I am in a company pension scheme with death benefit)
Maturity Date : 1/2/2015
"Basic Guaranteed Sum Assured" : £17808.00
"Plus previous bonuses of" : £3870.79
"This year's bonus" : £54.20
"Total plan benefits" : £21732.99
"Annual Bonus paid 2007" : 0.25% of basic guaranteed sum
I have 2 options. Keep it going and pay in another 79? x 100 = £7900.00 to get back what? , I don't know...depends on these mystical "final bonuses" ?
Cash in and get £15354.00 - Is this subject to CGT or other tax ?
Would I be better cashing it in, converting it all to repayment, paying the 15K
off the debt and £100/month overpay the mortgage?
I can't believe what these firms are getting away with:mad: , but I'm stuck on the hook now. I would be extremely grateful to hear what you folks think...:T
0
Comments
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Please post the maturity forecasts for the endowment.Trying to keep it simple...0
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The maturity projections are :
If growth is 3.25% 26700.00
4.00 % 28000.00
5.00 % 29800.00
:eek:0 -
wannabemoneysaver wrote: »The maturity projections are :
If growth is 3.25% 26700.00
4.00 % 28000.00
5.00 % 29800.00
:eek:
OK, so if you cashed this one in and used the lump sum to reduce the mortgage owed, also increasing the monthly mortgage payment by the redundant endowment premium, at maturity you would end up with 32,072, comfortably beating all their forecasts and with no risk..
Bit of a no-brainer really.Trying to keep it simple...0 -
EdInvestor wrote: »OK, so if you cashed this one in and used the lump sum to reduce the mortgage owed, also increasing the monthly mortgage payment by the redundant endowment premium, at maturity you would end up with 32,072, comfortably beating all their forecasts and with no risk..
Bit of a no-brainer really.
Should that not be factored into the equation?I am a Mortgage AdviserYou should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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