Endowment Decision - Stay in to 2013 or cash in now?

Kilkee_Rover

I would be very grateful for advice on my endowment with Friends Provident - unsure whether we should stick it out to the end or cash it in. I recently checked to see if it was unit linked - it isn't.:A We changed to a repayment mortgage many moons ago. Our outstanding mortgage is £42,000 on a tracker at 0.34% above base. We don't need the insurance and we can manage our mortgage comfortably. We are in fortunate position of excellent job security so no worries there either. What do the experts think??


Guaranteed sum assured £54,874
Declared bonuses £19,684
Surrender value £42,152
Monthly premium £157
maturity date 08/04/2013
maturity forecasts 4% 57,700, 5.5% 61,000, 8% 66,700
Interest rate payable on mortgage 1.04%

dimbo61

You have 4 more years of paying £157 a month x 48= £7536
Add that to the current surrender value and you get £49,688
Now in 4 years you might !!!! get £57,700/£61,000/£66,700 BUT know one can guarentee that ? can they.
If you cash in the endowment and clear the mortgage you will have 4 years of not paying a mortgage ( on whatever rate it is 1.04% today 6.04% in 2 years !!!)
You will also save £157x48=£7536 plus INTEREST
Dont know how much your mortgage is each month but you can earn 6% in a barclays regular saver ( before tax ) and lots of ISA,s paying 3.5% plus TAX free
I would cash the endowment and clear the mortgage ( if no penalty ! ) and save my mortgage payment and endowment payment in ISA,s or regular savers. GOOD LUCK

dimbo61

Is your mortgage £893.71 a month ? or close to that ?
£42000 over 4 years repayment at 1.04% is £893.71 a month
So 48x £893.71=£42897 saved

Kilkee_Rover

The mortgage is around that figure. It would be great not to have to pay that every month + the endowment premium

andysdad_2

Your decision boils down to where do you think you will get the best return on the £42,152 surrender value. You might get more by selling so it is worth following that up anyway.
Options:
Pay off mortgage at 1.04% to 6% or whatever figures you want to use for the next few years
Savings account
Punt on stocks and shares with a range of -lots% :eek:to +who knows%:j
Leave it with FP. FP in the bonus note indicated they now have the fund 84% in cash deposits so not much better than a savings account, but they will charge you to manage it.:mad:
Best of luck just don't question your decision once you have done it:beer:

dimbo61

You used the word WE so I take it you have "the OTHER HALF"
If you cashed in the endowment and paid off the mortgage you could then invest £250 x2 each month into the Barclays 6% regular saver and also invest £300x2 each month into ISA,s with Barclays 3.61% TAX free.
You mortgage and endowment are costing you approx £1050 a month
You could be saving £1100 a month plus INTEREST for the next 4 years instead. Good Luck in whatever you decide.

dimbo61

PS I dont work for barclays !
You may get even better rates FD were doing a 6% ISA but its now closed.

Forever_Red

dimbo61 wrote: »

You may get even better rates FD were doing a 6% ISA but its now closed.

They have on their website a 7% 12 mth fixed rate regular saver ISA. Save between £25 and £300 per month.

http://www.firstdirect.com/savings/

Alan

dimbo61

I looked at this 7% ISA and you have to move your current account to FD which is a lot of trouble for a 1 year 7% ISA with a max of £3600 invested.

Forever_Red

dimbo61 wrote: »

I looked at this 7% ISA and you have to move your current account to FD which is a lot of trouble for a 1 year 7% ISA with a max of £3600 invested.

Not bad though for someone who has an account with them....(thats me - all I need now is money to put in it:p )