Pru endowment advice

oowweenn

Hi, new to this so any advice appreciated. I am having to cash in a PRU endowment now and i had it valued last oct at £19500. I also had it valued last week and its now worth only £17800 a huge fall. Its a 25 year endowmenent and is maturing on 1st july this year with the yearly bonus due on ist april this year and the terminal bonus (if there will be one) due on 1st july . I have phoned PRU on this but they are very non commital. I am best to cut my losses and cash in now, wait till yearly bonus april first then cash in or try and limp along till july 1st and hope the terminal bonus is applied? I really need the money very shortly to pay my exwife off as she wont hold on till july to beneifit me. Any advice on whats best?

EdInvestor

It's very likely bonuses and payouts will be cut, I'd suggest you go now.

dunstonh

You need to find out the cost of early surrender. You may end up paying an MVR and penalty that wont exist on maturity.

Bonuses have already been but based on the FTSE being at its current level. It could go up or down. No-one can tell.

oowweenn

There is no penalty or MVR on the £17800 they quoted this was the amount they would pay now. I know no ones knows what will happen. Its a slipply hill!

EdInvestor

Pru cuts payouts up to 10%


http://www.citywire.co.uk/adviser/-/news/collective-investments/content.aspx?ID=330469&re=4800&ea=156896

dunstonh

Actually the cuts were between 6 and 10%. Not bad in when the underlying fund fell 19.7%

The typical mortgage endowment will be down 6.1% which is good when you consider that a unit linked fund of similar make up would have dropped around 25% in the same period. Nobody likes negative periods but at least Pru have managed to be much better than average. No surprise as Pru have a good record on this. Unlike most others.

kungfu=shampoo

I would give them a call and ask for the current 'locked in' value, this is the amount of the basic sum assured plus your annual bonuses. This should be the minimum amount that you will receive on maturity.

When you have this, compare it to the surrender value you have been given. Take into account the premiums you will be paying between now and then and see if it's worthwhile holding on to.

Also, what is the term of the policy? Speaking from the insurance company I work for, we are still paying out a decentish terminal bonus on 25 year terms, any less than that and it plummets.

oowweenn

Hi kungfu, the term is 25 yrs and its maturing 1/07/2009. Its due a terminal bonus but I wont get this if i surrender it now. I dont know what to do for the best I could end up losing on the capital then Pru announces that there is no terminal bonus due to market conditions. :eek:

EdInvestor

oowweenn wrote: »

Hi kungfu, the term is 25 yrs and its maturing 1/07/2009. Its due a terminal bonus but I wont get this if i surrender it now.

Common mistake.Surrender value includes accumulated terminal bonus.

The S/V may be subject to a surrender penalty for going early (typically 10%) so you have to weigh the likelihood that the TB will fall by 10% between now and maturity, thus wasting your additional contributions. If you think this is likely then better to go now.

oowweenn

Thanks for all the help it does help to talk! I will surreneder now as i think this is the way forward.
Ta everyone:T