Pru endowments - any advice please.

alimbee

We have 2 endowments, both still needed to pay off our mortgage.
I have posted details here as far as I have been able to get them.

Provider Ex Scot Am, Prudential, Unitised with profits
Basic and bonus units 5239.823
Surrender value £6,834.82 (this value was £7,056 in Feb 09)
Monthly premium £64.30
Maturity date Apr 2022
Maturity forecasts (feb 09) 4% £16,200 - 6% £20,700 - 8% £26,200
Terminal Bonus % (wouldn’t tell me on the phone)
Target £23,600.00 (policy inc. critical illness cover)

Provider Prudential
Guaranteed sum assured £13,230
Declared bonuses £6,595.98
Surrender value £15,454.40 (this value was £16,163.in Feb 09)
Monthly premium £52.82
Maturity date Jan 2016
Maturity forecasts 4% £24,500 - 6% £ not over phone - 8% £31,500
Terminal Bonus (not given on phone)%

Mortgage Fixed Until May 2012 at 5.99%
£50,000 interest only £11,100 repayment 12 years remaining.


We are considering surrendering both policies and paying off lump sums as and when we can without penalty. (currently 10% per annum)
We would be very grateful for any comments on the above.
Thanks

zygurat789

First of all don't surrender without finding out what you could sell them for. Yes sell them for.
Secondly these are stock market based investments. The stock market has not done well in a sustained period of low inflation. It did very well for my endowment policy from 1975-2000.
Always run in the opposite direction to the hurd.
Its your descision. Consider all your investments but always make sure you can pay for your house.
Food for thought?

alimbee

Hi, thanks for your reply.
I don't think we can sell the unitised policy? Happy to be corrected though.
I have had a quote to sell the other policy for £300 over surrender value and one offer to auction it, which is really making me question the long term value of the policy.

zygurat789

Houses are being auctioned at the moment - do you doubt their long term value?

alimbee

I'm not sure how you think endowments and houses are comparable?
I was rather hoping for some advice on whether it is better for us to keep our endowments given their current position, rather than an explanation of how well your endowment performed in the 80's and 90's. Thank you any way.

drp38

Has anyone any suggestions for the best places to see under performing endowments ? I ve heard you get a better return than just surrendering them ???

drp38

Opps ... Sorry that should have read SELL

turbobob

Probably the best place to go to see if a policy is saleable is APMM http://www.apmm.org/

Unitised policies cannot be traded.

Im_just_careful

I assume that you have explored the mis-selling claim route (assuming the real risk of this underperformance was not pointed out at sale).

They also probably provide some element of life cover, do you need this.

I decided to repay (overpay) my mortgage and just keep running the endowments.

After most of 10 years on this I've more or less got there and when the end of the endowments come I'll have a (much smaller than originally promised) lump sum.

I think you are selling at the bottom of the market if you do so now.