RSA/Phoenix Endowment - Keep or Surrrender?

JohnG

Hi Edinvestor & DunstonH,

Re: RSA/Phoenix Endowments

Further to earlier discussions on a previous thread (Endowments – Taking to Court?), here are the latest figures pertaining to the three endowments we are still paying into:

Policy 1:
Guaranteed Sum Assured = 10,890.00
Declared Bonuses = 8325.77
Surrender Value = 17,293.00
Monthly Premium = 41.58
Maturity Date = 13 May 2010

Policy 2:
Guaranteed Sum Assured = 3,015.00
Declared Bonuses = 2,305.19
Surrender Value = 4,778.00
Monthly Premium = 12.25
Maturity Date = 13 May 2010

Policy 3:
Guaranteed Sum Assured = 3,128.00
Declared Bonuses = 1,513.52
Surrender Value = 3,690.00
Monthly Premium = 14.33
Maturity Date = 01 October 2010

Our Mortgage and actual target amount = £46,000

I must admit on my initial calculations I think it does look the best option to surrender the policies now and put them all into our offset mortgage savings. Hopefully you can confirm this as it's slightly daunting to have to undo something that we have had in place for so long, but on the other hand I will be pleased if I knew it was the best option so I could free us from the clutches of the Phoenix. :mad:

Thanks in advance for your feedback.

Cheers :beer:
John
PS Re Equitable Pension, have still to look into figures– will get back to you shortly - can only handle dealing with one contentious issue at a time…..

EdInvestor

Hi John

You're right, it's a no brainer to surrender them, you'll save about 5,000 quid .

I've done 2 calculations here, one @4%,showing what you would get if you put the surrender proceeds in the bank, also paying in the premiums to maturity, and the other @5.5% which is what you would get if you used the proceeds and the premiums to overpay a typical i/o mortgage.

With policy 1 you would get 22,417 @4%, 23,676 @ 5.5% and 19,215 if you stayed with Phoenix

With policy 2 it's 6214, 6563, and 5320.

With policy 3, it's 5046, 5322 and 4642

THe total is as follows:

Guaranteed value staying at Phoenix: 29,177
Value @4% saving in the bank: 33,677
Value @5.5%, reducing the mortgage: 35,561

THis is an improvement. But, even at the best outcome with the surrender, you are still around 10k off the target amount.

So what I suggest you do is to go off and see a mortgage broker armed with these figures and ask what is the best thing to do to cover this.

The answer might be to remortgage to repayment at a lower interest rate (if available), with a slightly longer term, while also increasing your premiums a bit, after throwing all this endowment money at the problem.

I don't think it's going to cost you too much extra, but go off to the broker and he'll work it all out for you.

Definitely surrender is the way to go with this lot, think dustbin of history

HTH

dunstonh

Nothing to add apart from I concur.

JohnG

Many thanks, as you say surrendering them is very much the best option as it's clear it will reduce the potential loss than if we stayed with Phoenix. :j

As we have about £8,500 in the offset account at the moment and are currently putting in £100 a month we will should certainly have enough in the kitty and hopefully will allow us to retain a few pounds at the end. Mind you, my wife just said, by giving up the endowments it will give us the opportunity to pay off the mortage a bit earlier assuming we have the funds to do so whilst forfeiting any potential savings.

Obviously we will no longer have the insurance but as we only have 4 years or so in theory to survive and are still the right side of fifty we might risk it! :-)

Anyway, many many thanks for your very quick, helpful and reassuring assistance and for reminding me that I should do something about the situation instead of burying my head in the sand! I'm much obliged.

All the best for now
John :beer:

JohnG

Hi all,

Just thought I would give an update on this one as thought it might be helpful to others in similar situations.

First of all I have to say that dreaded company Phoenix, who I still feel effectively raided RSA policy holders funds, have not been at all obstructive in any way and have responded efficiently both over the phone initially in response to my subsequent written request to surrender policies. All they required from me/us was a written request and the original Endowment Policies/Schedules (Though I gather in other cases Proof of Deeds etc might be required).

Unfortunately though they have only transferred two of the policy funds to our allotted bank so will have to chase them up to find out why the other one is missing?

Also, I'm pleased to say that the amounts received so far have been as quoted a couple of weeks earlier plus subsequent monthly premiums so thankfully no additional penalties or anything!.

We have also just met with a local IFA who I must say was refreshingly open and not at all pushy and there is no fee for our initial meeting. Anyway it seems we have everything covered as well as we can but he will get back to us with information on my Pension as I still need to sort out my Equitable Life fund, such as it is - it seems it hasn't grown at all since 2002 though the reduction of the transfer fee to 8% is obviously a big help.

Back to the mortgage situation, we are now building up our offset account with these endowment funds so combined with our savings I work out we should be able able to get the amount owing to about £3,000 after only three years! (Much better scenario than the projected 12,000 to 14,000 shortfall in four years if we hadn't acted earlier).

The only issue we have now, apart from the missing endowment fund mentioned above, is whether or not to use some of the offset funds (about £7,000) to finance a garage conversion as we desperately need more room here! This obviously has a detrimental effect on our offsetting but still feel it is a better option than actually increasing the mortgage and/or taking out a 5 year loan. We would probably have to keep the offset rolling a further year or so until we pay the mortgage off but seems a smallish price to pay - any thoughts?

Hope this helps to reassure others like us that surrendering endowments is not too painful or difficult and that at last we can now move on! :j

weaver

After advice and excellant information from this board I have surrendered my phoenix endowment policy

I had lost my original policy and so all I did was send my last profit letter (2004 ) plus utility bill to them. with my bank details.

received payment into my bank 7 working days after posted to them.

pity the policies arnt as good as the service they provide.

Ive now paid off a lump sum, topped up our ISAs for this year and will add the maximum into 2007 year end ISAs after 5th april.

I need to re negotiate a new mortgage deal in October thats why Im putting in ISAs as soon as deal done I will use ISA money to reduce my mortgage again, leaving my remaining mortgage on a better deal than it is now.

Thank you to everyone on this board who offered excellant advice and pointed out all the pros and cons I feel better now Ive cashed it in and by start of 2008 Ill be Mortgage free and saved a few thousand quid

JohnG

Just when I thought this was all sorted I've now been informed by Phoenix that they can't proceed with the surrender of this last endowment because it's:

"Assigned to Security Pacific Trust Limited"

This relates to a separate Sun Alliance endowment covering a "Top Up" mortgage back in 1985.

I don't understand this to be honest, as the policy is clearly in our names as were the other two but I'm told I have to ctc this company to get them to provide a "Disclaimer".

That's easier said than done as try as I might I cannot locate any info on the company now. I gather there is a website somewhere which might help to trace them or the new owners but I can't find that either.

Please, any help in locating Security Pacific would be greatly appreciated?

Cheers
John

Endowments? "Entanglements" more like! :mad:

matto

A search on the companies house website using their previous names option reveals the following:

Name & Registered Office:
PARIBAS SPT LIMITED
10 HAREWOOD AVENUE
LONDON
NW1 6AA
Company No. 01639509

Previous Names:
Date of change Previous Name
14/12/1994 SECURITY PACIFIC TRUST LIMITED

JohnG

Fantastic! What can I say except many many thanks!

I'll be getting on to these people right away........

Cheers
John
:beer:

ScoobyZ

matto wrote:

A search on the companies house website using their previous names option reveals the following:

Name & Registered Office:
PARIBAS SPT LIMITED
10 HAREWOOD AVENUE
LONDON
NW1 6AA
Company No. 01639509

Previous Names:
Date of change Previous Name
14/12/1994 SECURITY PACIFIC TRUST LIMITED

Security Pacific ! ahhh I got stuffed twice.

Once when I bought with 100% mortgage 5% was loan via building society via them ! @ about 22.9% (mortgage rate 15.4) also got endownment at same time which was royal life ! - then pheonix. I too surrendered it last month after 3 months of trying to sell the blasted thing.

JohnG

Hi Scoobs,

Yes, it's almost starting to make sense now....

I called Parabas today, who I must say were extremely helpful, and they happened to mention that the Halifax originally bought Security Pacific (They who provided us with a Top Up at very High interest rate) I think in 1992.

All very interesting I'm thinking, having had our main mortgage thru the Halifax and all three endowments were thru SUN ALLIANCE/Royal Sun Alliance/Phoenix etc etc.

Strikes me they were all in bed together to cream off as much money from naive customers like me - it's all been a bit of a nightmare :eek:

Cheers for now
John