Any thoughts on my endowment

morrow56

dunstonh wrote: »

Obviously a total estimate but I wouldnt be surprised to see the Scot Am ones total around 33k.

Thanks again Dunstonh

By my reckoning my policies, combined, at 30th July 2008, at 8%, are worth £34,070 but your total estimate is that at May 10th 2010 then may be worth only £33,000

Can you explain your thoughts please

Thanks

dunstonh

My estimate is at 2010. I dont think they will hit 8% but will be closer to 6%. We have had a bad 12 months and with profits tends to lag a little. If current market conditions turn out not to be as bad as feared (and that is still quite possible as many of the issues giving concerns are starting to reverse already) then you may see a move towards 8%. Or of course it could get worse....

I think £33k is a fair guess.

morrow56

Nice of you to reply so quickly

Possibly £5,500 short...am now away for a stiff drink!!!

morrow56

Hi Dunstonh

I have copied the paragraph below from your reply to an earlier query today.

In light of what you are saying today about Prudential projections between June and September does this mean, in your opinion, that Prudential is not in fact lagging but still performing above the 8% mark on their policies.

Thanks for any input you can give

So, that puts it above target. I got some Pru updates the other day which showed the Pru plans in Sept had improved their projections at all three levels between June and Sept. That indicates that returns are above that shown on the higher illustration.

HI

morrow56

Dunstonh - I notice you replied with the paragraph below to an earlier query today.

So, that puts it above target. I got some Pru updates the other day which showed the Pru plans in Sept had improved their projections at all three levels between June and Sept. That indicates that returns are above that shown on the higher illustration.

Does this mean the Prudential is still in fact holding above the 8% mark

As i have said previously I need £38,500 to meet my redemption figures

Thanks so much for you help

dunstonh

8% projections actually mean around 6% net. So, its not as high as you initially think. However, yes, the latest projections on Pru ones increased but I did notice a small decrease on a Scot Am one.

Pru do have a good track record on their with profits fund and whilst past performance is no guide to future returns, they do have a lot going for them on the potential front.

morrow56

Thanks again for your quick reply...still quite worried though that I will have about a 5,500k deficit

dunstonh

Just had another Pru endowment summary update for Sept 08 and the projections are improved by £2000 at 4% and £1000 at 8%. That shows it exceeded 8% during that period (otherwise 8% projection would have remained the same if it equalled 8% or gone down if it had returned less).

This particular one has gone from a mid projection rate of £41,700 in Sept 03 to £51,000 in Sep 08. (against a target of 57,200).

So, you can see, it still performed above the 8% mark over the last 12 months.

morrow56

Do you have any similar info on Scottish Amicable, Dunstonh

Thanks

EdInvestor

morrow56 wrote: »

I need a total of £38,500 to clear my mortgage in May 2010.Figures are at 30th July

Endowment 1
Maturity forecasts 4% £24,200 - 6% £25100 - 8% £26,200

If you surrendered this one now and used the lump sum to redcuce the loan, also increasing the mortgage payment by the amount of the endowment premium, your retaurn at maturity would be 24,826.

So almost as much as the projection at 6% but with no risk.

Endowment 2
Maturity forecasts 4% £7340 - 6% £7620 - 8% £7870

Following the same procedure with this one, your return at maturity would be 7604, again almost the same as the 6% projection but with no risk.

I'm afraid that's only a total of 32,438 though, and the calculation is based on a surrender value which is out of date and could now be lower

The trend of terminal bonus and final values is falling due to the performance of the markets, and given the WP time lag, there is really not enough time left for these policies to make up the shortfall.

I would seriously consider surrendering them, and then overpaying the remainder of the mortgage with the endowment premiums plus whatever extra is needed to hit the target - you could also extend the mortgage maturity date a bit to make it easier if need be.