Any thoughts on my endowment

hansi

Does anyone know what the percentage growth rate was on policies maturing in 2008?

morrow56

Dunstonh

I got updated figures from Prudential on Dec 12 re my 2 Scot Am policies

The figures were down on the 4, 6 and 6% and the surrender value had dropped

Do you have any recent evidence that Scot Am policies are on the way back as you have said Pru policies are?

Thanks

dunstonh

morrow56 wrote: »

Dunstonh

I got updated figures from Prudential on Dec 12 re my 2 Scot Am policies

The figures were down on the 4, 6 and 6% and the surrender value had dropped

Do you have any recent evidence that Scot Am policies are on the way back as you have said Pru policies are?

Thanks

Not had any this month so far. I would expect a drop to be honest. With 2008 being rubbish for fixed interest, property and equities, there was no real hiding place. However, December and early January have improved a lot so there is the potential, albeit still early days.

morrow56

Thanking you again Dunstonh

Any forthcoming info could you please post it or perhaps even PM me

Andy

JohnPeard

Our endowment is due to mature in 2012, but we are in the fortunate position of now longer having a mortgage, so this was going to be our pension nest egg.

We were considering, because of the uncertainties in the financial markets surrendering the policy now.

In September last we were told the plan was on track to meet the £42,000 target and were given figures of assuming all future premiums were paid, growths of:

4% p/a - £40,000 6% - £43,300 8% - £46,400

In dated 4th February 2009 they estimated the following:

4% p/a - £34,100 6% - £36,300 8% - £38,600

There is no way that the policy will meet the target now - but how comes, even at a 0% return that the target can have dropped so much in such a short time?

Am I being paranoid in thinking that the Prudential is 'persuading' me to surrender the policy now, with a deflated value?

Your contributors thoughts would help...

Many thanks

dunstonh

There is no way that the policy will meet the target now

Why do you say that? You have 3 years to go and its still possible. Especially when you are looking at a low point. (October was the low point in the markets. Its 15% higher now).

but how comes, even at a 0% return that the target can have dropped so much in such a short time?

Most providers dropped their terminal bonus either fully or around 20% recenlty.

Am I being paranoid in thinking that the Prudential is 'persuading' me to surrender the policy now, with a deflated value?

Its not in their interests to do that. So you are being paranoid. Prudential (on Pru originals and not Scot Am) have never failed to hit target. Never doesnt mean they wont start to fail but you are looking at what appears to be the bottom of the market. So, you should expect it to fall back.

Given that it is likely to outperform cash in the remaining years and could well improve and you dont have a mortgage, I dont see the point calling it a day.

JohnPeard

Just an update...

I rang the Pru' this morning and asked why the figures were so dramatically different.

They replied that they had 'announced' in November that the terminal values of their endowments (ex Scot Amicable) were likely to be 10% down.

I asked why they hadn't written to their customers informing them but they said they had made the announcement in the Press.

To be fair, the lady I spoke to did say she agreed that, in hindsight, they should have notified customers by letter.

My approach is going to be the following. I shall telephone the Pru at regular intervals checking the current surrender value (which incidentally has increased by £200 in a week) to see if it starts to fall.

Many thanks for your response, Dunstonh, this is greatly appreciated.

EdInvestor

dunstonh wrote: »

Its not in their interests to do that.

Since they will take at least 10% of the value of your policy on your way out the door as a surrender fee, you may think it is in their interest for you to go early. (It may be in your interest too, of course). There are other complexities relating to reserving for guarantees on larger policies which could also mean it's in their interest for you to leave early.

morrow56

Figures update at 24/4/09

Received new figures yesterday - very worried!!!

Target amount is £30,000

14th October 2008
4% 31,830 6% £32,840 8% £33760

April 24th 2009
4% 26,480 6% £27,100 % £27,630

Anyone any idea whether these will improve before May 2010 maturity

Thanks for your help

dunstonh

Anyone any idea whether these will improve before May 2010 maturity

Only if they have a crystal ball.

However, there are indications that things are set to improve and the markets are typically reacting in advance of that which is why the FTSE is now over 20% up from its recent lowest point. That will feed back into the final bonus at some point providing markets dont drop again.