Annual Endowment statement confusion

Lady_K

I'm a bit confused about my annual standard life endowment mortgage statement. It says that the current value is approx £630 lower than its value last year is that right? I thought the value should be higher after another years payments

opinions4u

Lady_K wrote: »

I'm a bit confused about my annual standard life endowment mortgage statement. It says that the current value is approx £630 lower than its value last year is that right? I thought the value should be higher after another years payments

What type of policy is it?

If it's a unit-linked policy then the value of the units will have fallen sharply and the value of your policy will have sunk with it, despite your premiums being added to it.

If it's a 'with profits' policy, then any bonuses previously added cannot be removed. The amount guaranteed at maturity will not have fallen.

But if you decided to cash it in now (which is, presumably, the 'current value' you have referred to) you need to understand that the underlying investments will most likely have fallen quite sharply in the past 12 months.

There's been a credit crunch don't you know! This is one of the ways it affects us ordinary mortals.

Lady_K

I don't really understand these endowments but I see it says on the 2nd page with profits bonuses if that means anything. I'm not thinking of cashing it in its for my mortgage on my house. Its going to have quite a big shortfall

EdInvestor

opinions4u wrote: »

If it's a 'with profits' policy, then any bonuses previously added cannot be removed. The amount guaranteed at maturity will not have fallen.

True, but what will have fallen is the cumulative non-guaranteed terminal bonus.These have been dramatically cut over the last 6 months to reflect the falls in all the markts over the past 2 years.Sadly there are probably more declines to come, which is why it may be sensible for those whose policies are nearing maturity to cash in now..

Lady_K

Well this says

total current value 1st feb 2009 £10,928,20
total current value last year £11,599,00
Amount paid on death £27,000
Minimum payment at maturity £14,006.99

This endowmrent ends in Oct 2014

Theres other calculations but wasnt sure if I needed to put them here

Fiver55

Hi Lady K and Ed Investor, I've just had my statement too and I also didn't understand why the current value should be less. I am thinking whether its best to cash it in and haven't a clue what's the best thing to do.
Ed Investor, is there any hope for an improvement in the next few years do you think, how can things get much worse?

Lady_K

I cant cash mine in because its for my halifax mortgage, it gets from bad to worse what a mess I'mm worried sick about the shortfall as its only got till 2014 and if its losing value on top its even worse

I dont understand endowments or what to do for the best but I'm going to find last years statement and compare them I could lose my house thats what I'm worried about

molerat

My current value was £2k less than last year with another years worth of payments added so actually nearer £3k. If that is the annual statement value you have then it is even lower now. My annual statement was only -£1k. The new projected terminal values were £5k less than last year. The current values can be seen by registering for on line servicing.

dunstonh

I am thinking whether its best to cash it in and haven't a clue what's the best thing to do.

Based on the figures you have posted, I cant see why you would think its best to cash it in. Yours seems like its best to keep it.

EdInvestor

POst some more info for a view

Provider
Guaranteed minimum at maturity
Surrender value
Monthly premium
Maturity date
Maturity forecasts
Mortgage interest rate

Lady_K

Edinvestor, Not sure who you meant to post this but posted mine anyway

STATEMENT 2009
Provider - Standard Life
Guaranteed minimum at maturity - £14,006.99
Surrender value (current value) - £10,928.20
Monthly premium - £33.67
Maturity date - 27/10/2014
Maturity forecasts - 3.75% £14,600.00 - 5.50% £15,900.00 - 7.25% £17,400.00 - Target amount £27,000.00
Halifax mortgage interest rate - Tracker rate 1.240% (1/04/2009) (lasts till 2011 unfixed)

Difference from last years Annual Statement is

STATEMENT 2008
Provider - Standard Life
Guaranteed minimum at maturity - £13,966.88
Surrender value (current value) - £11,599.00
Monthly premium - £33.67
Maturity date - 27/10/2014
Maturity forecasts - 3.75% £16,500.00 - 5.50% £18,300.00 - 7.25% £20,300.00 - Target amount £27,000.00
Halifax mortgage interest rate - 5.990% (1/03/2009) 5.740%(1/04/2008)