Endowment Surrender While On Benefits

martinsimpson

Hi All.

Like most people's endowments mine has performed badly. It's a 25 year policy with 5 years left to run and I expect the shortfall to be around £18,000. It would be better to surrender the policy now and use the money to pay off more than half of my mortgage. But if I do this will I violate any DWP rules (£6,000 savings rule for example) and have my benefit stopped or reduced? Will they allow me to surrender my endowment and use it to part pay off my mortgage as the endowment is intended to do. I don't want to keep it while the world markets are in utter turmoil

Anyone have any reliable sources of information about this?

Many thanks

Voyager2002

I suggest that you ask them, preferably in writing. Even if I knew definitively what the rules said, there is always the chance of an official giving you grief about it if you actually go ahead. Your best defence against this is to have a letter from them saying that what you plan to do is acceptable.

As an aside, I would not surrender an endowment at a time when the world's markets are at a low point. Five years is plenty of time for the markets to recover, and for some of the benefit to feed through to the value of your investment. Again, seek advice from someone who is better qualified than I am.

[Deleted User]

martinsimpson wrote: »

Hi All.

Like most people's endowments mine has performed badly. It's a 25 year policy with 5 years left to run and I expect the shortfall to be around £18,000. It would be better to surrender the policy now and use the money to pay off more than half of my mortgage. But if I do this will I violate any DWP rules (£6,000 savings rule for example) and have my benefit stopped or reduced? Will they allow me to surrender my endowment and use it to part pay off my mortgage as the endowment is intended to do. I don't want to keep it while the world markets are in utter turmoil

Anyone have any reliable sources of information about this?

Many thanks

If you surrender the endowment and then use the money to pay off part of your mortgage the dwp may see this as deprivation of capital,the rules on this are complex and can be interpreted in different ways by different DMs (decision makers)
Might be an idea to write to your benefits office and seek written advice before taking any action,also this may not be the best time anyway to surrender given the fact that stock markets are suffering badly,again professional advice may be needed.
If you could afford it one solution would be to increase the capital repayments you make on your mortgage,but on benefits I appreciate that wouldnt be easy