Endowment Policy - To Cash In Or Not To Cash In ?

Cardiff_Devil

Hi, first time poster !

I am seriously thinking of cashing in my endowment, and after reading some excellent advice on these forums, thought I would post my details in the hope that someone can help me decide.

I took out a Commercial Union (now Aviva) Homemaker Policy in July 1997, but was lucky enough to be able to pay off my mortgage two years ago, so kept the policy on as a savings plan.

The details according to my latest red letter dated 4/7/09 are:

Start date: July 1997
Maturity date: July 2022
Monthly Premium: £30.35
Current value: £8212.31
Target amount: £19,290.00

Projected final amounts:

4%: £10,600.00 (2008 projection £12,000.00)
6%: £13,000.00 (£15,000.00)
8%: £15,800.00 (£18,500.00)

Thanks for reading.

zygurat789

I took out an endowment mortgage in 1975. The mortgage was for £10000 ( oh heady days) and the endowment was projected to mature for £12500. In 2000 the endowment produced almost twice the projected amount and I was naturally ecstatic.
The reason, so I was told, was the economic situation during the period of the policy. If you are too young to remember there was high inflation and interest rates for most of the 25 years. My mortgage started at 8.5%,rose up to above 12% and only came below the 8.5% again in the late 1990s.
The endowment was backed by shares which performed well during the period which included some eye-watering inflation figures, probably because shares tend to hold their real value.
Given the amount of money pumped into thhe economy by quantitative easing inflation could well be the next problem in which case your endowment might blossom and be as good as mine was.
In any case it is not a bad thing to have exposure to the stock market and I know that endowments are not at all fashionable NOW. Always run in the oposite direction to the herd - but make sure your house is safe.