What do I do with my endowment?

DS_Queen

Our endowment has 6 years left to run. It was supposed to pay out £55,000 but is currently worth about £27,000. Fortunately, we don't need it to pay off our mortgage! Despite paying in nearly £900 last year, our guaranteed amount only increased by £20. At a growth of 4%, we could end up with just over £29,000 at the end of the term. The current surrender value is around £20,000. If we keep it till the end, we will be paying in another £5,260 for another £120 profit (at £20 a year). Is it worth keeping, if only as life insurance for the next 6 years?

Robert_Sterling_3

There have in the past been ups and downs in the stock market which affect the payout from endowment policies.

The past is not a guide to the future.

Theoretically a good plan is to buy stocks and shares at a low price and then sell them at a higher price.

What many people do is sell their shares ( or Endowment ) when the price is low. :eek: :eek: :eek:

Buying stocks and shares is a gamble.

The Stock Brokers are the bookmakers and make a profit.
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What should you do ???

It is a gamble.

You make the call.
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Good luck.

SailorSam

I'm in a similar position, my endowment ends in three years but is not now needed to pay off the house. Although the expected payout is a lot less than i expected, i've decided this late in the term i may as well stick with it.
I may be proved wrong, it's a gamble.

cash-magnet

I paid off my mortgage many years back and my endowment is also now just a glorified savings account but as it only has 2 years left and the premium is only £34 a month, I'll just let it continue in some hope the markets pick up over that time and it scraps back a little more value.

EdInvestor

Post some info about the policy

Provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity projections
Interest rate payable on mortgage

DS_Queen

EdInvestor wrote: »

Post some info about the policy

Provider: Friends' Provident
Guaranteed sum assured: £19,085
Declared bonuses: £8,032.64
Surrender value: £20,242
Monthly premium: £73.05
Maturity date: 18/1/2015
Maturity projections: 4% £29,700, 5.5% £32,100, 8% £36,600
Interest rate payable on mortgage

: No mortgage

Info provided as per request. Many thanks.

DS_Queen

Any further advice on this now I have provided figures?
Many thanks

Julesy

Hi. I'm in a similar position to you DS Queen. I took out an Endowment Mortgage when buying my flat in 1992. I received lots of warnings about shortfall over the past few years. My claim for misselling was rejected (probably coz I left it too late), but I wasn't concerned as I knew that the value of my flat had more than quadrupled over these years, so I wouldn't need the endowment to pay it off.

I sold my flat in November 08 and my partner and I are currently renting, looking to buy together later this year, depending on how things go. I decided to hang on to the endowment for now, but I've just had my annual statement and see that the value has decreased by £3,000 since last year! I only pay in £65 per month, but that means I've been paying into a big black hole over the past year (and the rest...). :mad:

Do I cut my losses and cash in or sell now? We could probably use the money to put towards a bigger deposit for a new house. Or should I hang on to it and hope it will go up again over the coming years. It's only £65 per month which I barely miss. Or would that lump sum be better invested elsewhere?

Appreciate any advice.

Jules

woozywendy

We have just surrendered our endowment. 9 months ago the surrender value was £8900, it is now £8600 and we have since paid in £450 in premiums. We are going onto a repayment mortgage so will not have to worry about the capital at the end of the term.

andysdad_2

FP have moved their fund to 84% bonds 8% equity and 8% property so even 4% return could be high now.
Can you get a better return on teh money else where can you get the life insurance? If so it may be worth surrendering/ selling