surrender endowment v savings?

neilrogers

I`m in the lucky position of being able to pay off my mortgage due to inheritance, the dilemma I have is do I surrender my endowment (current surrender value £20k with 9yrs to run, set up to yield £51k) or use £11k in an ISA to make up the extra required to reach the mortgage total ?

ISA or Surrender?

george_jetson

How confident are you that the endowment will reach the predicted surrender value at the end of the term? Have you been receiving 'green letters' from the endowment company?

In general endowments are seen as poor quality investments as they are inflexible and have high charges. All else being equal I would be tempted to dump it and keep the ISA going as it's more tax efficient.

One of the best things I ever did was get shot of my endowment - I took a bit of a hit but I didn't want to throw good money after bad for another 15 years...

nbbradshaw

I agree with george_jetson, I gave up my endowment and took a hit and it was definitely the best decision even with hindsight.

However, given the recent drop in the stock market and the chances are we haven't seen the worst yet, your decsion is whether to take a hit now or ride out the recession storm and hope that everything recovers in about 3+ yrs time. After writing that last sentence, the choice is made easier, at least in my mind.

Good Luck with your decision

setmefree2

neilrogers wrote: »

I`m in the lucky position of being able to pay off my mortgage due to inheritance, the dilemma I have is do I surrender my endowment (current surrender value £20k with 9yrs to run, set up to yield £51k) or use £11k in an ISA to make up the extra required to reach the mortgage total ?

ISA or Surrender?

You should definitely post this on the mortgage and endowments board where there are alot of financial advisors who will help you. It's not always better to cash them in.

Good Luck

SMF2