endowment statements

bassetphil

I have just recieved this years statement and was horrified! whilst everyone knows endowments are not reaching potential I now discover mine is worth less than it was 12 months ago despite premiums of about £2500 this year. I have effectively lost some £4000 in the last year as if I had cashed it in and stuffed it unbder the matress. If this trend continues it will be worth nothing at maturity in 9 years time. Should I cut my losses and cash it in now or ride the storm hoping for an upturn?

dunstonh

I now discover mine is worth less than it was 12 months ago despite premiums of about £2500 this year.

As to be expected.

I have effectively lost some £4000 in the last year as if I had cashed it in and stuffed it unbder the matress.

Yes. However, that isnt how investing works. What about the years when it was making 10-20% a year? You have to average it out. You cant just pick the good years.

Should I cut my losses and cash it in now or ride the storm hoping for an upturn?

There has already been an upturn. Whether its the start of a sustained period of growth or a false dawn wont be known until some time in the future. However, this is not an uncommon event. You have had several of these during the life of your endowment and they can actually be a good thing with unit linked plans with enough time left to take advantage of buying units much cheaper than they were previously.

jm28cardiff

I assume its a unit linked plan? As the unit price has fallen, your monthly premium will buy you more units than you otherwise would have got. If the unit price rises again, all those extra units will go up in value. So you have not "lost" anything at this stage, "loss" can only be determined at maturity or surrender.

bassetphil

thanks for responses i feel a little reassured, its just such a big financial worry.