Endowment Policy Surrender,Sell or Keep Advice Needed?

dinglebert

Standard Life Policy.

Start Date: 12th July 1988
End Date: 12th July 2013
Guaranteed sum assured: £6825
Declared bonuses: £4832
Surrender value: £9836
Monthly premium: £26.20
Maturity forecasts: £15590
Interest rate payable on mortgage 5.95%

We can leave B&B now and look for a better rate. Thought is to cash in two policies, other halves is a unit linked policy so surrendar value only.

Options are to surrendar other halves policy and surrendar/sell my policy and use the money to reduce the interest only part of the mortgage down to around £2000 which we would convert to repayment. We could then repay in a shorter time for around the same cost as now monthly.

Or let the policies run their course.

Advice welcome

Charlton_King

dinglebert wrote: »

Standard Life Policy.

Start Date: 12th July 1988
End Date: 12th July 2013
Guaranteed sum assured: £6825
Declared bonuses: £4832
Surrender value: £9836
Monthly premium: £26.20
Maturity forecasts: £15590
Interest rate payable on mortgage 5.95%

We can leave B&B now and look for a better rate. Thought is to cash in two policies, other halves is a unit linked policy so surrendar value only.

Options are to surrendar other halves policy and surrendar/sell my policy and use the money to reduce the interest only part of the mortgage down to around £2000 which we would convert to repayment. We could then repay in a shorter time for around the same cost as now monthly.

Or let the policies run their course.

Advice welcome

I'm in much the same position - and with similar figures.

Recently, I asked for a surrender value from my provider and it came back, hedged around with all sorts of hints and encouragements not to sell.

I think I'm going to do just that and apply the proceeds to reducing my mortgage. I have the impression that many others are doing the same, now that times are uncertain and many providers, my own included, stopped paying annual bonuses years back.

One move you could make is to see whether you could sell it for more than your provider's surrender value. Unfortunately I can't do this with mine but I believe this is done quite commonly.

dinglebert

I've put the details on a couple of sites to see what comes back. However did this a couple of weeks ago as well and got no interest at all

Charlton_King

Maybe the market in them has crashed..? Can't say that I've heard that.

Anyone out there in the know?

EdInvestor

dinglebert wrote: »

Maturity forecasts: £15590

What rate of return is this forecast using?

If you surrendered now and used the lump sum to reduce the mortgage owed also boosting the mortgage payment by the amount of the premium, then your equivalent return at maturity would be 13,802.

That's quite a bit lower than the forecast you have given.Could you post all three projections please.