Do I Cash In Standard Life Endowment

dunstonh

Looked at from the savings point of view endowment returns are taxed @ up to 20%.

That is not correct. Ed has been told the correct taxation many times before but chooses to ignore it.

The selection of funds available to invest in is usually poor and if With profits, incur high charges.

By modern standards that is the case with a lot of them but remember with endowments many have the charges front loaded in the early years. Some have little or no charges after they are paid for. You cant change what went before so you can only look at what is ahead.

Some with profit funds are still viable. Not many but SL is one of those that can still be right for people. You just have to look at the fact that they have exceeded 7% p.a. after tax, charges and life assurance for a lot of people. Tell me a savings account that has done all that?

Ed is telling you to surrender based on a generic opinion and flawed information. That decision could be right but the reasoning behind it is wrong.

For example, in post #3 she told you its not worth keeping. Yet we dont know what your mortgage promise value is. What if yours is one of the £10k ones? You would be throwing that away if you surrendered/sold. She also worked on the basis that the projections are the net return but they are not as they used the gross return which understates the performance on the better funds.

We dont have the full data to make a proper analysis and even when we do it will always be a judgement call. Remember that Ed was telling people 3 years ago to dump SL endowments and we have examples documented here on this site of those that didnt and went on to perform above the higher example rate on the projections. So, saying it wont perform is wrong. It may not but it might.

At least find out some more of the facts and make a more informed decision.

opinions4u

It's a low cost with profits plan.

If the TEP guys don't contact me this week, it looks like surrender is the appropriate call - if nobody wants to buy it, the potential value cannot be that good.

dunstonh

It's a low cost with profits plan.

Low cost endowment is the product type. However, with profits comes in conventional and unitised forms. SL did both.

if nobody wants to buy it, the potential value cannot be that good.

You cannot read into that. Phoenix plans are one that as soon as someone says they have one you know its going to be bad. Yet there has been a market for those in recent years. Its not the performace but the size of the surrender penalty. The difference is effectively a guaranteed return. It is the guaranteed bit that interests the TEP guys as these are typically bought to provide a hedge/alternative to gilts.

opinions4u

Okay - for clarity it ain't unitised

dunstonh

conventional versions dont appear to be running as well as the unitised. However, they do tend to have larger promise values. Find out that promise value. If its good, at may be a keeper. If its low then it doesnt look as attractive.

EdInvestor

The TEP traders' quotes (if any) will give you an idea about the value of the mortgage promise.

dunstonh

EdInvestor wrote: »

The TEP traders' quotes (if any) will give you an idea about the value of the mortgage promise.

Unless its asked for they wont know it. I'm guessing it hasnt been asked for as opinions 4u hasnt mentioned in this thread how much it is despite it being mentioned quite a lot. With it being a conventional with profits, the promise value is important as its the one thing that could swing it from a keep to a sell.

EdInvestor

If they exclude it, that gives you a good idea of how they value it.