Can anyone offer advice on my endowments, please?

Penny_Farthing_2

Sorry, it's another one of these questions but I'd be very greatful for advice - in numpty beginner language please, if possible!

We have an interest only tracker mortgage with Abbey. It's 0.23% above BofE base rate (tracker ending ending mid March 2010). We overpay each month so that whatever the interest rate, we pay £1300 each month. We owe about £159,000 at the moment.

The 3 endowments we have are:

Guardian homebuilder
Target amount - £12000 (also the death benefit)
Started July 1988 maturing 20/7/2013
monthly premiums £35.36 (were paying in less when we started)
value at 20/7/07 £7055.75

Friends Provident
target amount £50055 (also death benefit)
maturing 30.06.2013
monthly premiums £93.14 (since 25/06/92)
cash in value at 13/8/07 £20,558.15 (having paid in £16,858.34!!!!:mad: )

Scottish Widows
target amount £13,995(also death benefit)
Monthly premiums £19.67
runs from July 88 to June 2013
from 2006 bonus notice - total benefit £7347.92

Sorry, I've mislaid the more up to date paperwork.

My question is, should we cash any/all of them in? We can make £15k to £16k overpayments on the mortage a year (we've used up some of this year's allowance with our regular overpayments). We could pay the resulting money off the mortgage capital and add the monthly premiums into the monthly mortgage payments. If we cashed them in at the right time, we could make sure we'd used the whole of last year's overpayment allowance then a few days later, stump up the relevant amount of next year's allowance.

Basically, are they worth hanging on to?

Thanks in advance.

sandiep

Seeing as none are due to mature for 4 years I would say yes, hold onto them all. Because even if it's a long recession, even a depression, I think that in 4 years time Stock market values are going to be more than they are now. Credit Suisse bottomed out last week, switiching its instructions over from "sell" to "neutral", which people are reading as a good sign.

You don't make any losses on equity (or endowments) until they are sold.

But i am not a financial advisor, and this IS something that you should take to an independent financial advisor that has full product knowledge, and full vision of your personal circumstances.

Penny_Farthing_2

Thanks Sandiep
I know I should get IFA advice, but having had 2 advisors in the past I trust the people on here more.:D

My DH says we should stick with them so he'll be pleased that someone says he's probably right!

feisty1

[quote=Penny Farthing;18580455]Thanks Sandiep
I know I should get IFA advice, but having had 2 advisors in the past I trust the people on here more.:D My DH says we should stick with them so he'll be pleased that someone says he's probably right![/quote]

Yes, but what happens if the people on here are wrong.........oh I know you will post later & ask how to apply for mis-selling!

Penny_Farthing_2

I don't really understand your post Feisty. Not sure if it's sarcasm or not - sorry.

What I meant was that if you see an IFA, it's one person. On here, I've found in the past that you get different perspectives - and a lot of knowledge. If a poster gives advice, someone else can always bring their own knowledge/experience to bear on that (witness the DIY forum's discussions on using PVA glue to seal new plaster as an example!).

I certainly didn't mean to imply that IFA's are a bunch of liars!!!

EdInvestor

Really need up to date info to take a view.Please post the following for each policy:

Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity forecasts

Penny_Farthing_2

EdInvestor- thanks
The more recent statements have gone AWOL. My DH may have taken them into work so will be looking there tomorrow. Will post then.

EdInvestor

You'll probably need to ring them up to get the surrender values and maturity forecasts.

Penny_Farthing_2

I now have the info needed;

Guardian unit linked
Guaranteed sum assured - £12,000
Declared bonus - none (unit linked)
Started July 1988 maturing 20/7/2013
monthly premiums £35.36 (were paying in less when we started)
surrender value today £5948.40 (lots less than 2007)
maturity forecasts: 4% £8,680 6% £9,360 8% 10,000


Friends Provident original with profits fund
Guaranteed sum assured £50055
Declared Bonuses 3% and final bonus of 25%
maturing 30.06.2013
monthly premiums £93.14 (since 25/06/92)
Surrender value today £20,217.98
Maturity forecast 4% £28,400 5.5% £30,200 8% £33,300

Scottish Widows low cost endowment
Guaranteed sum assured £13,995
Declared bonus some included already but lady on phone couldn't give details. £834 terminal bonus
Monthly premiums £19.67
Maturity date- 18/7/2013
Surrender value today £6374.00
Maturity forecast 4% £9,140 6% £9,970

Hope this info will help

Thanks for any advice

EdInvestor

Penny_Farthing wrote: »

Guardian
maturity forecasts: 4% £8,680 6% £9,360 8% 10,000

If you cashed this one in and used the lump sum to reduce the mortgage also paying the premiums in to maturity, your equivalent return would be 7,923.

Friends Provident
Maturity forecast 4% £28,400 5.5% £30,200 8% £33,300

If you did the same with this one your return would be 25,807

Scottish Widows
Maturity forecast 4% £9,140 6% £9,970

And with this one, 7678.

There is probably still a risk premium in these policies, but only because you are paying such a low interest rate on your mortgage.

If your mortgage interest rate goes up, then you should check again, as the likely advice would then be to surrender.

Penny_Farthing_2

Thank you v much EdInvestor. Just a final question. Have many endowments made as much as 4% growth in the last year or two.