Expected it to be bad but not that bad

ragydybyd

Barclays managed units endowment. Sum assured £18000 at 81.96 per month due to mature in September 09.

3 Years ago Amber letter 2 years ago Green letter last june red letter warning of £680 shortfall.

Rang today asking for updated figure and had resigned myself to shortfall of about £3k. Rather taken aback to have current valuation of £13100.

Could not get any sense from Barclays about options and engaged in a one hour ping battle between call centres.

With 6 months left is it likely to get drastically worse? Are there maturity bonuses to factor in to the mix or do I steel myself for a £5k hit on savings?

Any advice gratefully received.

Trying_to_be_good

Did you ask for today's value, or a projected value? It might be worth calling them back, as if it's today's value you could be that you could be subject to a Market Value Reduction/Adjustment, and not have final bonus included? Just a thought.

dunstonh

Unit linked endowments react more closely to the markets they invest in. So, they would go up more in good times and down more in bad. The upside is that you are now buying units more cheaply and in the long run these have the potential to swing you back into a better position again.

However, in your case, with just 6 months left, you havent got time on your side. 6 years and you would be fine but 6 months is too tight.

You dont get bonuses on unit linked plans (unless its a unitised with profits plan.)

ragydybyd

Thanks for that.

Should I turn it in now or wait to see what happens in the next 6 months. I can just about chalk up the situation now to experience but a further collapse over the next 6 months would be extremely difficult to take.

dunstonh

Should I turn it in now or wait to see what happens in the next 6 months

Crystal ball job. The next 6 months are likely to be volatile in both directions. If there is no penalty at the moment to get out and you can afford the current value but not if it got worse then I would be inclined to go now.