Performance of endowments????

happybop

Hi,

I took out a Standard Life endowment policy for my mortgage in 1995 but I am not in the "mis-sold endowment boat" as my FSA explained the pros and cons.

What I can't get my head around is that when I took out the endowment a growth rate of 7.5% gave a projected maturity value of £57,800, but now ten years on 7.5% is only worth £39,800.

It says on my statement that the growth rate for the past year has been 2.0/2.5%.

Is this a really bad investment, or one where Standard Life just move the goalposts to suit themselves?

Any views appreciated.

:xmassign:
happybop

EdInvestor

happybop wrote:

What I can't get my head around is that when I took out the endowment a growth rate of 7.5% gave a projected maturity value of £57,800, but now ten years on 7.5% is only worth £39,800.

It says on my statement that the growth rate for the past year has been 2.0/2.5%.

I guess what this means is that to get to a maturity value of 57,800, the policy needed an average annual growth rate of 7.5%.

But it hasn't achieved that - indeed last year it only grow by 2-2.5% and thus it is now likely to have a value of only 39,800.

Did you think the 7.5% growth rate was guaranteed?

happybop

Hi EdInvestor,

No, the figures were only illustrative. I guess I expected the fund to be balanced enough that it would perform at least as well as a deposit account. My FSA put in all the right bits about performance not being guaranteed.

Just have to hope for a decent windfall from them next summer!!!!

Thanks
happybop

dunstonh

No, the figures were only illustrative. I guess I expected the fund to be balanced enough that it would perform at least as well as a deposit account.

And most have outperformed deposit accounts over the long term. You cannot expect a short term which includes a stockmarket crash to have better figures.

My FSA put

Financial advisor. FSA is the regulator.

It says on my statement that the growth rate for the past year has been 2.0/2.5%.

Is this a really bad investment, or one where Standard Life just move the goalposts to suit themselves?

The endowment is just a tax wrapper for a savings plan. It is what you invest in that matters. It is also the thing that tends to get overlooked all the time by consumers and inexperienced financial advisors or tied financial advisors (who are not allowed to recommend funds).

Standard Life have a range of investment funds. Some have grown very very well. Some less so. You havent mentioned what funds you are invested in.