FP Endowment vs personal loans

mp764mp

I have had a FP endowment since 1987 which was originally tied to our mortgage. However, because of the shortfall warnings, I switched the mortgage to repayment and retained the endowment as a method of saving. In light of the poor performance over the past 4 or so years and the likelihood of a tiny (or no) final bonus, I am considering surrendering/selling the endowment to pay off a couple of personal loans that I have. Any reason why this might be a mistake?
Endowment
Provider Friends Prov
Guaranteed sum assured £11748
Declared bonuses £7713
Surrender value £17020 @ 24/1/09
Monthly premium £46.08
Maturity forecasts @4%pa £21900 as at 11/7/07
@8%pa £26100 as at 11/7/07
Maturity date 18/5/2012

Loan1 £7744 o/s, 6.5% APR, £340pm, end Jan2011
Loan2 £6767 o/s, 5.9% APR, £389pm, end May2010
Mortgage £15983 o/s, 5.63% APR, £347pm, end Jun2013

Many thanks

EdInvestor

mp764mp wrote: »

Maturity forecasts @4%pa £21900 as at 11/7/07
@8%pa £26100 as at 11/7/07

If you cashed this one in and used the lump sum to pay off the loans ,also paying in the premium to further reduce the mortgage, achieving an average interest rate of 6%, at maturity your return would be 22,085, more than the likely FP return and with no risk.

So I would bin this one and proceed as you suggest.

Amid all this talk about how much debt everyone has, when I see queries like yours I wonder how many other people have tatty old endowments or other savings plans hanging around, which would reduce their debts to a much lower figure if rationalised.Now's the time for a bit of financial 'decluttering', methinks.

mp764mp

Thanks Edinvestor, I was hoping that you would reply, I've noted your responses to other enquiries and always felt them to be good advice. It seemed an obvious choice to me in my case, just glad to have your confirmation.

Many thanks