friends provident endowment mortgage

swrobertsona1

I have a 25 year policy due to mature in 2013. It was to cover a £30000 mortgage but thankfully that is paid off. Monthly payment is £40. Sum assured is £10,500, bonuses to date £5,900 and final bonus rate currently17%. Latest surrender value is £13,000 down £2000 since May. I am struggling to work out whether I would be better off surrendering, making policy paid up, carrying on paying the premiums or selling the policy. I don't know anything about the selling option or how to find a reputable buyer. Any advice gratefully accepted. Ali

EdInvestor

Please post the maturity forecasts.

You can seek a sale quote here: https://www.apmm.org

swrobertsona1

Hi, last statement was in May 08 and if growth were 4%, payout would be £20,100. But I don't think it will be that much , do you. Thanks. Ali

Geenie

We have just this morning received a cheque for our Scottish Provident taken out 25 years ago. It has seen some highs and lows and we thought about selling it some years back when all the muck started hitting the fan about endowments, and would we ever be lucky to see anywhere near the £36,000 it was originally taken out for?!!:o

But we decided to stick with it, as it was no longer needed for a mortgage repayment, but as savings, and we have a lovely cheque for £40,000 in front of us now, which I gather is tax free as well!! so the advise we were given 25 years ago has been good!

Not that I am saying this will be the case every time, but I just wanted to post a positive experience on endowments, when often all one hears is doom and gloom about them, and people selling in panic.

EdInvestor

Geenie wrote: »

We have just this morning received a cheque for our Scottish Provident taken out 25 years ago..

I guess that will be one of the last policies which got the LAPR tax relief?

It did make a difference.

EdInvestor

swrobertsona1 wrote: »

Hi, last statement was in May 08 and if growth were 4%, payout would be £20,100. But I don't think it will be that much , do you. Thanks. Ali

No, you really should update the figure.

Also, since you don't have a mortgage, what will you do with the money if you surrender? What rate of return would you like to use for the comparison?

Geenie

EdInvestor wrote: »

I guess that will be one of the last policies which got the LAPR tax relief?

It did make a difference.

Yes it was, though we had forgotten this until we saw no tax was going to be deducted from our final payment. I have just looked it up and from what I can see LAPR was stopped in March 1984, so we got ours just in time in 1983.

swrobertsona1

Hi, thanks for help.If I sold or surrendered the policy I would put it in a safe savings a/c. With interest falling fast i would expect a much lower rate than when I first considered this. Might use the money before 2013 to help offspring buy first homes but no definite plans. I don't need the money just now-just thought I might be better to take it out now. Perhaps not? Ali

Lynn11

Geenie wrote: »

We have just this morning received a cheque for our Scottish Provident taken out 25 years ago. It has seen some highs and lows and we thought about selling it some years back when all the muck started hitting the fan about endowments, and would we ever be lucky to see anywhere near the £36,000 it was originally taken out for?!!:o

But we decided to stick with it, as it was no longer needed for a mortgage repayment, but as savings, and we have a lovely cheque for £40,000 in front of us now, which I gather is tax free as well!! so the advise we were given 25 years ago has been good!

Not that I am saying this will be the case every time, but I just wanted to post a positive experience on endowments, when often all one hears is doom and gloom about them, and people selling in panic.

Thats it good news. I took out an endowment for my flat in year 2000 so it wil mature in 2025, and I am still paying even though we have moved and are paying off our current mortgage. It is a savings plan for my pension days and I hope that it will make a bit of money when the time comes, Enjoy spending/saving your money.

EdInvestor

Lynn11 wrote: »

I took out an endowment for my flat in year 2000

Gosh that must be one of the last ones sold, endowments were pretty well obsolete at that time, replaced by ISAs.

If you plan to keep the plan long term you would be wise to consider switching to an ISA, as you will pay 20% tax on the returns in the endowment, whereas the ISA is tax free.Can make a big difference over a long period.

Which provider are you with?

Dick_here

EdInvestor wrote: »

I guess that will be one of the last policies which got the LAPR tax relief?

It did make a difference.

It made a difference to the premium paid, but not to the maturity value.