Endowment Policy Advice - Surrender??

chic109

Just wonder if you could offer some advise. I have an endowment with FP which was taken out in 1998 for 43,507.

Provider: Friends Provident
Guaranteed sum assured: 24,862.84
Declared bonuses: 2,151.84
Surrender value: 6,770.00
Monthly premium: 70.61
Maturity date: 3/11/2023
Maturity forecasts: 4% - 26,800 5.5% - 31,500 8% - 41,200

I currently have a 63k fixed rate mortage with Halifax @ 6% (I know taken out just before the rates started to fall !) of which 43k is interest only & 20k repayment.

I currently also have credit card debts of approx 6.5k which I would like to clear, so am thinking of surrendering the endowment to clear these off - which would lower my outgoings by approx 230.00 per month.

Do you think this is advisable? Would it be worth trying to get a better mortage rate with my mortage provider even though I am tied in for 3 years??

Any advise greatly welcomed....thx:rotfl:

CynicAl_3

Important - have you received a red letter from FP stating that your endowment will not meet it's originally stated target? If so, do what we did and inform them that you are making a mis-selling complaint. This should get you into their complaints procedure which I think is fairly strictly regulated by the FSA. When we did this, we eventually received an offer which was way more than the surrender value. Also, we noticed (in the very, very small print!) that the endowment company would pay any early redemption penalties imposed by our mortgage company if we used the settlement to pay a chunk off the mortgage! Best move we ever made. :T

chic109

CynicAl wrote: »

Important - have you received a red letter from FP stating that your endowment will not meet it's originally stated target? If so, do what we did and inform them that you are making a mis-selling complaint. This should get you into their complaints procedure which I think is fairly strictly regulated by the FSA. When we did this, we eventually received an offer which was way more than the surrender value. Also, we noticed (in the very, very small print!) that the endowment company would pay any early redemption penalties imposed by our mortgage company if we used the settlement to pay a chunk off the mortgage! Best move we ever made. :T

I did think about making a claim but the policy was sold through a IFA & I have looked at the old paperwork & all risk details etc are listed, so don;t really believe that I have a claim as it is down in writing.

EdInvestor

chic109 wrote: »

Maturity forecasts: 4% - 26,800 5.5% - 31,500 8% - 41,200

If you cashed in the policy and used the lump sum to redu ce the mortgage also increasing the mortgage payment by the endowment premium you would end up with 33,788 which is considerably better than the FP mid rate which they are unlikely to meet.

You'll do even better if you use the lump sum to get rid of credit card debt and then boost the mortgage payment by both the endowment premium and the credit card repayaments.