Scottish Widows Endowment - advice needed!

mramra

I'm after a bit of advice if anyone can help, I'm unsure what to do with an endowment policy I hold and what options are open to me.

Details of endowment
Provider: Scottish Widows (originally Lloyds TSB)
Start date: August 1998
Term: 25 years
Plan: 'Low Cost Mortgage Plan' 50:50 Income Fund and Balanced Fund
Value Aug 2008: £25,920
Current premium: £238.45 per month
Target value: £117,900 (on target for £122,000 at Aug 2008 with 6% growth)

As far as I understand I have four options: continue paying, make policy paid up, surrender to SW or sell endowment to a third party?

I no longer need the life cover and my mortgage is now repayment so I am looking at this purely from an investment point of view, not sure if I 'm chucking good money after bad or if the investment is worth continuing with.

I intend to call SW to get an up to date valuation - is there anything else I need to ask them to assist in making a decision?

Thanks in advance for anyone who can offer any advice. :T

mramra

Bumpity bump. Anyone???

kborom

Just been looking into this myself.

One question is whether the plan is unit linked. If so there does not seem to be anyone around who buys them so that could be one option down.

I rang both of my plan providers last week, I added the future repayments to the existing surrender value and compared that to the minimum guaranteed amount to see if there was any value in continuing.

One thing I found was that one provider, the Pru, do not give a final value for this plan which is half index linked but give a 4%, 6% etc growth estimate of the final payout. You also appear not to have this minimum guaranteed value so perhaps you also have an index linked one? If not, see if they will give you the min guaranteed value.
The other one, 100% with-profits plan with FP, did, and there seems to be value in both plans so I am keeping them on for at least the short term.

I have scanned these forums and several other people are asking the same questions, but no answers. I did find through Google that the market for 2nd hand endowments was OK in 2007 but could not find anything since.

Sorry I cannot be of any further help here, but it appears that the only topic on endowments is mis-selling!

mramra

Thanks for the reply. It is unit linked so does that mean that companies that buy second hand endowments would not be interested? If so at least it simplifies my options.

kborom

mramra wrote: »

Thanks for the reply. It is unit linked so does that mean that companies that buy second hand endowments would not be interested? If so at least it simplifies my options.

I am by no means an expert but the first few endowment buying companies on Google all seemed to specifically exclude them.

EdInvestor

Post some info:

Surrender value of endowment
Maturity date and forecasts
Interest rate payable on mortgage


You won't be able to sell it.

mramra

Just called Scottish Widows and had some shocking news.

Current value £20,944 (down from £27,947 in May 08) !

Projections being sent in the post so don't have that yet.

Mortgage rate on outstanding balance of £200k (repayment mortgage) is 4.99% but planning to switch to 3.99 fixed for 5 years when the current fixed period ends in May 09.

mramra

Forgot to say, maturity date is Aug 2023.