Cash in endowment

chrispcnc

Any advice please.. Is it a wise decision to cash in my endowment policy and pay the sum off my mortgage. This will reduce my mortgage monthly premium and cancel endowment monthly premium.
Endowment set to pay £30.000.00 just had the " Alert letter" I have been offered £ 24.000.00 to cash in . Policy matures Feb 2012.

EdInvestor

Post more info about it

Provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity forecasts
Interest rate payable on mortgage

chrispcnc

Scot Amic now the Pru Provider
£10,896.00 G sum assured
£19,254.49 Dec bonuses
£23,808.00 Surr value
£40.00 Month prem
First letter not going to meet £30.000.00 target figure
Int on mortg 3.5%

EdInvestor

I need the forecasts to make a proper comparison.They should be a@4%,6%,8%, something like that.

chrispcnc

EdInvestor wrote: »

I need the forecasts to make a proper comparison.They should be a@4%,6%,8%, something like that.

I beleive the forecast were 4%.. Can't find endowment letter at present .. have a feeling its gone through muncher !

chrispcnc

re Forecasts Projected final amt Projected short fall
4% £ 28.200.00 £ 2.752.00
6% £ 29.900.00 £ 1.052.00
8% £ 31.700.00 £ 748.00 SURPLUS

EdInvestor

chrispcnc wrote: »

re Forecasts Projected final amt Projected short fall
4% £ 28.200.00 £ 2.752.00
6% £ 29.900.00 £ 1.052.00
8% £ 31.700.00 £ 748.00 SURPLUS

If you surrrendered the policy and used the lump sum to reduce the loan, also increasing the mortgage payment by the amount of the endowment premium, at maturity your return would be 27,915 with no risk.

If the WP fund makes a very low profit or a loss over the next 3 years, then this could be a better result than staying in.On the other hand if we get a good recovery, you could end up with a surplus as in the 8% projection.

What's your view of the market's likely behaviour over the next 3 years? Or do you not want to be a hostage to fortune? What you do with this one is really down to your attitude to risk.