Standard Life endowment early maturity should we quit?

Pez

We have a 22 Standard Life with profits endowment due to mature this July. I've just found out that the early maturity option on the policy means we can leave without an exit penalty. Didn't even know until now what early maturity meant.

St Life cut their terminal bonus twice last year & we've lost a thousand pounds or so since last year.

Very tempted to take the surrender value & run. Are there any reasons why that's not a good idea? Anybody think the endowment bonuses will improve over the next 6 months or so? Grateful for opinions. Thanks

Gorgeous_George

It isn't likely to improve in the 6 months to July. I'm not an expert but I'd expect more cuts to be announced at the end of this month.

If you phone up and surrender as soon as possible, you may get your money before any more damage is done. If it is tied to a mortgage (or ever has been) there may be a delay while Standard Life contact the lender for confirmation that the policy is no longer required as security.

GG

EdInvestor

Pez wrote: »

I've just found out that the early maturity option on the policy means we can leave without an exit penalty. Very tempted to take the surrender value & run. Are there any reasons why that's not a good idea?

Nope, lucky you, I'd get out of there fast.

Anybody think the endowment bonuses will improve over the next 6 months

No, they are much more likely to fall..

Pez

Many thanks all. Bonus declarations I think are due at the end of this month (January). Is that what you meant Gorgeous about getting out before then? That they may cut them again?

Gorgeous_George

Exactly.

In Jan 03 my policy was worth £24,149.66
In Feb 03 it was worth £20,861.13

In Jul 03 it was worth £22,000.55
In Aug 03 it was worth £21,230.50

In Jan 04 it was worth £22,647.05
In Feb 04 it was worth £20,280

In Jan 08 it was worth £25,476.88
In Feb 08 it was worth £25,418.51

The missing years are when I didn't bother checking the surrender value.

My thread followed my journey to surrender.

GG

Pez

Thanks G. George - I read your 'journey' - like you we couldn't claim misselling - we bought in 1987, though am giving it a go, just in case.

We were advised several times over the years to hang onto the Standard Life policy because it would probably make up the shortfall on our other (zombie) fund with Alba Life but S Life started to fail too, about 2001. It picked up in 2007 & was quite good by last July - only 3,000 pound shortfall but now it's started to fall again. Will get out if we possibly can. Thanks for
your help. These endowments are a nightmare & make you (me) feel like a total mug.

Gorgeous_George

As expected more cuts were announced on Tuesday.

Dis you get out in time?

GG

Pez

Just come back to the forum - it was a all bit traumatic, agreements from the building society to release us from the policy faxed to Standard Life just in time - the afternoon before the bonus cuts! Many thanks, George, for mentioning that cuts might be imminent. Otherwise wouldn't have acted so quickly. I still worry if we did the right thing - but it feels good to have paid off half the mortgage & reduced our mortgage payments.

Don't know if it was a fluke or a loophole, but with early maturity policies - our original building society, Halifax, had an interest in the endowment policy and had we stayed with them, I think they would not have released us from the endowment. But we re-mortgaged in 2002 with Nationwide & when we asked to take early maturity option, no-one at Standard Life asked whether we still had the mortgage with another company. It was great as we avoided an exit penalty. So it's worth trying to get out if you have an early maturity option & have re-mortgaged to another building society.

Thanks again for help in this forum;