please help -should i sell/cash in my endowment

EdInvestor

i-luv-free-stuff wrote: »

prudential
target £23650
proj shortfall at 4% £6405 - at 6% £1650 ?

If you cashed in this endowment and used the lump sum to reduce the mortgage, also increasing the monthly mortgage payment by the endowment premium, your return at maturity would be 25,252.

This compares with the Pru's projected return @6% growth of 22,000.

There seems to be no reason to keep this policy if you have no need of the life cover as you should get more by taking the risk-free route of paying down the mortgage.

dunstonh

I'm assuming that APMM are a trustworthy organisation then?

yes.

I was unsure whether companies actually bought endowment policies any more, but if it's more likely to get a better amount from it than surrendering it, I'll definitely go for that.

Yes. There is still a good market for endowments. Most people are unable to tell a good endowment from a bad one so plenty of decent endowments are being sold. Even those that are not so good can be attractive where there is a big surrender penalty as that can be quite a lot of the future return.

A lot of the confusion over good/bad endowments is that the projection rates are often very unreliable. They often understate the likely performance or overstate it. A projection may be at 4%, 6% and 8% and thats before charges. The fund could be performing at 8% after charges (which would require around 10% projection rate on the examples). So, the 6% illustrated figure could show a shortfall and the policyholder thinks its bad but in reality its on track for a surplus. The bad ones are the closed with profits funds that really have little or no potential. With those, the projection rates often overstate the likely return.

Dick_here

schoolfundraiser wrote: »

my husband died at 52 and his death in service pension to me and daughter was worth less than half of what he signed up for when he first started paying in 14 years before due to changes in rules etc.

Did you not also receive a death in service lump sum though ?

i-luv-free-stuff

EdInvestor wrote: »

If you cashed in this endowment and used the lump sum to reduce the mortgage, also increasing the monthly mortgage payment by the endowment premium, your return at maturity would be 25,252.

This compares with the Pru's projected return @6% growth of 22,000.

There seems to be no reason to keep this policy if you have no need of the life cover as you should get more by taking the risk-free route of paying down the mortgage.

thanks edinvester
i am going to sort it out this week