Endowment - to sell or keep ?

trf1960

We have just received our yearly statement from Friends Provident regarding our endowment. We started this policy in July 1996 paying £98.65 a month with an end date of July 2021. Fortunately we have already paid off our mortgage so this endowment is no longer needed, thankfully, given that it is under-performing anyway.

It just irks us that we have paid more into this policy than its current value and with the way interest rates are going, there is no way it is ever going to look particularly healthy.

We appreciate that the credit crunch and market falls have depreciated just about everything but is it seriously worth us continuing to pay into this endowment or rather look to surrender the policy, take what is left and open up a high earning fixed term bond or likewise? We already have ISA's each as well as savings accounts and a 2 year fixed term bond.

EdInvestor

I would not expect an FP endowment to perform any better than cash - certianly the risk premium you expect from equities has gone.

dunstonh

Some FP endowments use unit linked funds and the charges are quite low. A unit linked one could still be good value for money.