C.I.S. endowment - surrender time ?

Dick_here

Hi all

I've just received the latest update.

Policy due to mature July 2014 (25 years)
Premium £80 per month
Sum assured / target amount £50k
Basic sum assured £21,450
Projections:
£37,400 @ 4%
£40,800 @ 5.75% (down from £44k last year)
£44,600 @ 7.5%
Current surrender value £28,441.40 (down from £30k last year)

They say that 5.75% is a "reasonable assumption of long-term growth", but they said that last year (and every year recently) yet values drop each year.

If I accept that middle projection for argument's sake, I'll be paying in another just under £5k to get back an extra £12k. This seems good enough, but the projection has gone down by £4k in a year, a bad year I know.

However, I asked about the current maturity value last year and was told the same policy was then paying out at £58k. So are the projections way out, or are payouts actually likely to decline by £3-4k each year ?

Thoughts anyone ?

dunstonh

They say that 5.75% is a "reasonable assumption of long-term growth", but they said that last year (and every year recently) yet values drop each year.

They are not actually saying that they are going to achieve that or likely to. It's illustration/projection speak rather than an objective likelihood. Personally, I think they will be lucky to hit the lower rate, let alone mid rate.

So are the projections way out, or are payouts actually likely to decline by £3-4k each year ?

Projections will fluctuate and will depend on market conditions.

Dick_here

dunstonh wrote: »

They are not actually saying that they are going to achieve that or likely to. It's illustration/projection speak rather than an objective likelihood.

But by saying they think the middle projection is reasonable, they're leaning that way.

Personally, I think they will be lucky to hit the lower rate, let alone mid rate.

The way they've been going lately it looks that way !

Projections will fluctuate and will depend on market conditions.

Of course, understood.

dunstonh

But by saying they think the middle projection is reasonable, they're leaning that way.

Thats how it sounds but you typically find that the companies that have used reduced projection rates are the ones that are most likely to not hit those rates.

I did a review of a CIS pension this week and had been on zero bonus since 2002. It used reduced projection rates at 6.5%. Looking back since that pension was launched in 1988, the bonus rate on the plan has never hit 6.5%. So the projection rate is totally unrealistic. I havent done a CIS endowment review that I can recall but it isnt an investment I would want my money in.

makemesumdosh

i have a 25 year cis policy

i pay £70 a month

it has 10 years left to run on a target of £40,000, the lower range is a shortfall of around £6000,

do i ride it out, surrender or try to sell on 2nd hand market.

i cannot go down mis selling route as already done that 7 years ago and they gave me £2600 the differance between a repayment mortgage

i haven't have a surrender quote yet.

Dick_here

!!!!!!_here wrote: »

Hi all

I've just received the latest update.

Policy due to mature July 2014 (25 years)
Premium £80 per month
Sum assured / target amount £50k
Basic sum assured £21,450
Projections:
£37,400 @ 4%
£40,800 @ 5.75% (down from £44k last year)
£44,600 @ 7.5%
Current surrender value £28,441.40 (down from £30k last year)

They say that 5.75% is a "reasonable assumption of long-term growth", but they said that last year (and every year recently) yet values drop each year.

If I accept that middle projection for argument's sake, I'll be paying in another just under £5k to get back an extra £12k. This seems good enough, but the projection has gone down by £4k in a year, a bad year I know.

However, I asked about the current maturity value last year and was told the same policy was then paying out at £58k. So are the projections way out, or are payouts actually likely to decline by £3-4k each year ?

Thoughts anyone ?

And just to show how things have improved over the past year... :j

Projections:
£39,500 @ 4%
£42,500 @ 5.75% (down from £44k last year)
£45,800 @ 7.5%
Current surrender value £32,839.60 (up over £4k on last year).
Current maturity value £48,963.49

So fingers crossed, things look much better now :j