Frozen endowment what to do

dwf49

We have an endowment which we froze as it would not repay our mortgage and went on to a repayment mortgage this will mature in 2013 with winterthur life. Since we got our annual statement in March 2008 the value was £16,000 but this has gone down to £13,000 at present date. We have been to the onbudsman re being missold the endowment but with no success. What do you advise cash in or leave it to mature in 2013.
Thanks
dwf49

EdInvestor

Post some more info
Fund(s) the money is invested in
Surrender value
Interest rate payable on mortgage
Maturity forecasts

Gorgeous_George

I guess that £13,000 gambled on Premium Bonds would be better than sticking with an endowment that has lost £3,000 in 6 months.

Always a difficult call but surrendering the endowment puts you in control and is less stressful.

GG

dwf49

Thanks for the replys dont really understand but here goes
Fund(s) the money is invested in (100% unit funds)
Surrender value (at the moment 13,000)
Interest rate payable on mortgage(we have a repayment morgage with nationwide to finish in 2013)
Maturity forecasts(not sure)dont get one because no morgage with them
thanks
dwf49

Gorgeous_George

dwf49 wrote: »

Thanks for the replys dont really understand but here goes
Fund(s) the money is invested in (100% unit funds)
Surrender value (at the moment 13,000)
Interest rate payable on mortgage(we have a repayment morgage with nationwide to finish in 2013)
Maturity forecasts(not sure)dont get one because no morgage with them
thanks
dwf49

Hi

The forecasts are what the endowment company (not the mortgage company) say the policy could be worth at maturity assuming growth of, for example, 3.5%, 5% and 7%.

Assuming your mortgage rate is 6%, paying the £13,000 off the mortgage will save you about £4,000 off your mortgage by 2013.

Your call is whether the policy will suddenly improve and return more than £17,000 by the time it matures in 2013 (optimist). If you think it will, you need to understand that there is a risk that it will not (pessimist). There is also a risk that it will mature and return less than £13,000 (masochist?).

Do you want to take a risk, however small? If not, surrender the policy. If you do want to take a risk, good luck.

Hindsight is 20/20 of course and you should have surrendered the policy in March 2008. Maybe even when you decided to freeze the policy.

I'm not a financial adviser so cannot offer advice but, I surrendered my Standard Life policy in July 2008 just 18 months before it was to mature. I think I called it right but I should have surrendered in January 2003.

GG

dwf49

Thanks GG some good advice just one more if i did cash it in and drew the £13,000 where is the best place to put it at the moment apart from under the bed:D to get some sort of return for it
dwf49

Gorgeous_George

I've just put £3,600 in a cashISA with Principality. It pay 6.25% until April 2010 so there is sone protection from falling interest rates. If you have a wife/partner, they can do the same so that £7,200 taken care of leaving £5,800. I keep about that much in my Nationwide Flexaccount e-saver for emergencies (I have a BTL so I have more emergencies than most people). There are likely to be better places.

GG

dwf49

Thanks for that we are also with Nationwide so will take a look at that
dwf49