Moving - not sure what to do with endowments

bobber

We are hopefully moving soon and im attempting to sort out a new repayment mortgage for £160K (currently have IO mortgage for 63K with 2 red Alert endowments attached to it).
Im really confused what to do with the endowments - sell, surrender, keep on as savings (!) or use as part IO mortgage (based on intermediate projected final amounts). My gut reaction is to surrender or sell (if they qualify) and put towards moving costs or add to deposit, with an extra £100 saved each month.
Ive looked at other threads and noted the info required, but cant find info on either endowment paperwork/statements on guaranteed sum assured, annual or terminal bonuses, sorry

The info I do have:
Standard Life Homeplan Life with Profits started 92 (25 yr) for £37000
Monthly premium 50.20 (low start for first year)
Current value: 8503
Current projections at maturity: low 18800, inter 22100, high 25900
cost of future premiums: 6927

Scottish Widows House purchase savings plan unitised with profits started 99(25 yr) for £27000
Monthly premium 46.61
Current value: 3387.37
Projections given June 05: 4% 15900, 5% 18100, 6% 20500

Im sure I cant sell the SW as its unitised, but not sure about SL or when I could surrender to protect windfall. I could afford to keep them going if advised to, but feel the money invested in this house move would give me better security in the long run (new house needs doing up). We will need life assurance (didnt when I took out endowments of course) but have read Martins article about getting it cheaper elsewhere.

Really appreciate any help on this please as Im confused. Thanks

dunstonh

SW have a pretty good fund range and have funds with 10% p.a. long term average potential. Switching funds on that one may be the most appropriate course of action.

SL With Profits should heard towards the inter rate with annual bonuses but future terminal bonuses are really an unknown. Whilst other companies have started increasing terminal bonuses, SL have been reducing them. After DM, there could be a rush out of with profits which hits the funds hard.

I would be inclined to get my DM bonus from SL and then call it a day but review the fund options on the SW and pick appropriate funds with better potential than the UWP.

bobber

Thanks for that dunstonh. Hope its alright to ask another couple of questions.

How would I go about switching funds with SW - can I ring them direct or do I have to go through an IFA?

Do you know when I could stop the SL - I assume after the shares have been distributed (July I think?) or is there some sort of lock in? Do you know if I can I sell that one or is it surrender/cash in only? The statements look similar in format to SW, so im wondering if its unitised too and cant be sold?

EdInvestor

Hi bobber

Need surrender values for these two to give a view (ring up and ask). Ask if your SL one is unitised while you're at it. Don;t surrender until after the float (early July.)

bobber

Hello EdInvestor

Ive got current surrender value as of close of business last night.

Standard Life: 8515.84 including bonus of 586.44. Matures 2017
The agent said the policy is divided into 5 segments and therefore I could choose to keep as any of the 5 or surrender them all and can cash in any time after 31 May to keep my shares. Can I sell this policy or is it surrender only?

Scottish Widows: 3387.36 Matures 2024
It is definitely unitised with profits and the agent said that I will start to get bonuses after 10 years of the policy running. She will send me current projected maturity figures in approx 4 days.

Would be grateful for any additional help you can offer

dunstonh

It is definitely unitised with profits and the agent said that I will start to get bonuses after 10 years of the policy running. She will send me current projected maturity figures in approx 4 days.

Thats not how the UWP fund works. Its a fob off, incorrect answer. As for switching funds, you need to verify what alternative funds are available (they may come back and say none. However, with UWP funds, there tends to be a range of unit linked funds avaiable as well). Once you know what funds are available, you can switch you holding and future contributions to the other funds on a spread appropriate to your investment goals. You dont need to use an advisor.