help with endowment policy

dizzylady

please could someone help should i surrender my standard life endowment policyit says high risk of short fall the summary is on a 37,052

low 17,700 shortfall 19,352
med 20,400 shortfall 16,652
high 23,500 shortfall 13,552

the plan matures in 2018
surrender on 7th jan 08 was 11,300.89
surrender on 7th jan 09was 10,773.48
rang today 27th jan 09 surrender value 10,165.88

mortgage outstanding is 34,000 paying 69.80 a month interest and over paying by 150.oo a month

thankyou
jo

EdInvestor

What interest rate are you paying on the mortgage?
What is the monthly endowment premium?

dizzylady

endowment payment is 49.48 a month and interest rate is 2.25% thankyou

EdInvestor

dizzylady wrote: »

low 17,700 shortfall 19,352
med 20,400 shortfall 16,652
high 23,500 shortfall 13,552

If you cashed it in and used the lump sum to reduce the mortgage now, also increasing the monthly mortgage payment by the amount of the endowment premium, by maturity you would make the equivalent of 18,403, more than the low forecast on the endowment, without taking any risk.

So there doesn't seem to be much point in holding this one.

If you proceed as above, you will have to increase the mortgage payment by more than just the endowment premium to pay off the shortfall, but it's a good time to tackle it, as your interest rate is so low.

dizzylady

thankyou for your advice it is really appreciated. we are paying 150 extra in to the mortage account already amonth and if we go ahead and surrender the endowment will put sum straight of the mortage and then raise the over payment to 200 a month thanks again