Unitised with profits endowment - should we surrender?

lucyandthomas

Hoping that someone will be able to help - would be much appreciated.

My husband and I each hold a unitised with profits endowment with Scottish Widows. The two policies are linked, and each had an original target value of £44650. The sum assured for each is £89300.

Details below relate to each individual policy:
Maturity date: 6/9/2024
Monthly premium: £96
Surrender value (today): £8807
Terminal bonus £824
MVR: £665
Maturity projection (from July 2008): 4% @ £33400, 5% @ £37700, 6% @ £42600
Allocation percentage will increase (from 94%) to 101% in August 2009

We have an offset mortgage fixed at 5.25%.

Would we be better off surrendering these endowments and offsetting the mortgage (plus two lots of £96 monthly premium)? Does it make sense to wait until later in the year when we will receive 101% allocation percentage? Just feels like we are throwing good money after bad at the moment.

Thanks in advance

Met_Bobby

lucyandthomas wrote: »

Just feels like we are throwing good money after bad at the moment.

You are. See an IFA (not a mortgage broker as it is an investment related product) to explain in detail.

EdInvestor

lucyandthomas wrote: »

Maturity projection (from July 2008): 4% @ £33400, 5% @ £37700, 6% @ £42600

Would we be better off surrendering these endowments and offsetting the mortgage (plus two lots of £96 monthly premium)?

Indeed you would. If you did this, at maturity you would have an equivalent return of 45,020 which beats all their projections at no risk.

I would bin these immediately and do as you propose - replace the life cover first if you need to do so.

lucyandthomas

That's great - many thanks for your help. Next stop Cavendish for some life cover quotes