Standard Life endowment help

Sealwife

I have a 20 year Standard Life endowment policy due to mature in Dec 2011.

It used to there to pay off a mortgage but owing to changes in the property market and me moving house I am now thankfully mortgage free. I did consider cashing in the plan when I became mortgage free in 2005 but decided to keep it as a savings policy and life assurance.

I got comensation for being mis-sold this endowment about 6 or 7 years ago.

It's a Homeplan endowment. The amount it was meant to cover was 43k. I've just received a statement which tells me that the value has fallen from £27,830.97 in Dec 2007 to £23, 096.25 in Dec 2008. I currently pay in £98.73 per month.

I'm wondering whether I'd be best off just cashing the thing in. The investment projections they have given me for the final value have dropped by approx 10k for lower, mid and high rate projections since 2007.

Any advice would be appreciated. I really don't want to chuck any more money into a black hole.

D

EdInvestor

Post some info about the policy

Guaranteed sum assured
Declared bonuses
Surrender value
Monthly payment
Maturity date
Maturity forecasts

Average return you would expect to get if you cashed in and reinvested the money.

Sealwife

EdInvestor wrote: »

Post some info about the policy

Guaranteed sum assured £1640
Declared bonuses None, this policy doesn't have bonuses
Surrender value £23,898.42 as of today
Monthly payment £98.73
Maturity date 15 Dec 2011
Maturity forecasts Low 28.600, Mid 30,200, High 31,800

Average return you would expect to get if you cashed in and reinvested the money.

I've answered your questions in green above. Can I add that the maturity forecasts have dropped by approx 10k since last year - eeek.

I spoke to SL today and they said that selling this policy isn't an option as nobody would buy it and that if I make it a paid up policy they just freeze it so it is no longer invested.

I'd welcome your comments

Gorgeous_George

Your policy has lost £5.919.48 over 12 months and you are still wondering whether to cash it in or not

You will think that 2008 was extraordinarily bad and you may be right but 2009, 2010 and 2011 may prove that 2008 wasn't that bad after all. You could continue paying £1,184.76 per year and lose even more money.

I cashed my policy in July 2008 because I believed that the policy would lose more money going forward. (Thread).

You would need to be a raving optimist to believe things will improve by December 2011 sufficiently to make the policy worth keeping )all IMHO of course).

GG

Sealwife

I absolutely agree with you George but I'm checking out all possible options before acting. For some reason my husband seems to be quite attached to this policy and is a bit reluctant to cash it in. I think he thinks there might be an upturn.

My opinion is that at least if I cash it in I'll have £23k full stop. If we don't, we might have virtually nothing AND I'd have to continue stacking in more than 1k a year as well.

EdInvestor

If you cashed this policy in and put the lump sum on deposit at a net 3% (after tax) for the 2 years to maturity you would end up with 27,804.

The company's low forecast (the most realistic one in current markets) is 28,600, not much more. A mortgage promise might help if you have one, but isn't guaranteed.

Payouts at SL and others will decline, possibly quite dramatically, over the next few years so I would take the money and run.

Sealwife

I have. We cashed it in yesterday! Assuming all goes well it will arrive in our bank account next week and from there it will go into a fixed rate deposit account.

Thanks all.