Cash in endowment?

bibbob66

I have a with profits endowment with 9 years left to pay 60 a month. It has lost 2k in the last year through lost bonus. I have an off set mortgage where I can over pay and also use savings to save on interest. The endowment is way behind target even though its now not linked to my morgage I kept it going as a form of saving. Would I be wise to cash this in and pay 60 a month extra off my mortgage plus put the cash in from the endowment to off set my mortgage?

Ed_Zep

I can't advise whether to cash in or not but if you do decide to cash it in, investigate selling the policy rather than surrendering it. You may get more.

dunstonh

You have told us nothing about what you have. We cant help you unless we know about it. Provide us some details.

bibbob66

I have a policy worth £12600 now with 9 years left to run paying £60 a month. Future valuation at 4% is £21000. My mortgage is £125000 21 years left to pay fixed for one more year at 5.25%. I over pay at the moment £65 a month. I was thinking about cashing in and overpaying the £60 from my policy making my over payments £125 and using the lump sum to off set. I cant sell the policy something to do with the with profits.

kborom

bibbob66 wrote: »

I have a policy worth £12600 now with 9 years left to run paying £60 a month. Future valuation at 4% is £21000. My mortgage is £125000 21 years left to pay fixed for one more year at 5.25%. I over pay at the moment £65 a month. I was thinking about cashing in and overpaying the £60 from my policy making my over payments £125 and using the lump sum to off set. I cant sell the policy something to do with the with profits.

I know that some of the third party buyers of endowments don't buy unit-linked, but thought that with-profits funds could be sold in this way? You need to establish exactly which type you have first to see if this option is viable.
I have a 50/50 one, and get the 4%/6% etc estimates. I also have a with-profits and get a final guaranteed cash value with every statement, so yours may be unit-linked.

Assuming the £12600 is a recent surrender value then the way I look at it (I am not an expert) you have about £19K worth of value in this (surrender plus future payments) against a forecast £21k return. Fairly close.

Not much help I know, but you need to be sure of all the facts and all your options before you do anything.

GreenNinja

bibbob66 wrote: »

I have a with profits endowment with 9 years left to pay 60 a month. It has lost 2k in the last year through lost bonus. I have an off set mortgage where I can over pay and also use savings to save on interest. The endowment is way behind target even though its now not linked to my morgage I kept it going as a form of saving. Would I be wise to cash this in and pay 60 a month extra off my mortgage plus put the cash in from the endowment to off set my mortgage?

Hi Bibbo, I was in a very similar position to you, had 10 years left to go and was paying 50 a month. I also lost 2K last year. Didn't really get any advice on here to be honest, so have cashed in the policy and paid the amount off my mortgage. My thinking is that the interest I now won't have to pay on this amount paid off, plus the interest I should now get if I invest my 50 a month over the next 10 years in ISA instead should work out better.
Good luck with your decision!

bibbob66

Thanks everyone for your comments.
I'm not able to sell this policy, tried that route today.
Im sure if I sell the interest rate will shoot up!!
And then the world recovery can be all my good work!!
Its a tough choice to make

EdInvestor

POst some more details about the policy for a view

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

bibbob66

Provider Standard Life
Guaranteed sum assured £46000
Declared bonuses £350 was 2k+ last year
Surrender value £12600
Monthly premium £60
Maturity date 2018
Maturity forecasts at 4% £21000 6% £24500
Interest rate payable on mortgage 5.25% fixed for one more year off set mortgage.
Hope thats enough info?
Thanks