endowment advice

strugglinon

hi people,
im wanting peoples advice or thoughts on which way to go....
im looking at changing our mortgage... its part repayment part int only covered by an endowment..
we owe 21k on repayment and 30 k intereset only...
and its only 6 yrs to run... our 2 thoughts are as follows.....
sell the endowments present value of 17k which i would pay off the mortgage leaving 34k on a repayment basis.... hence no endowment shortfall......
or convert more to repayment so we have say 20k on int only and the rest on repayment....
only looking a these as my endowment should be paying out 30k in 6 yrs time but with a present value of only 17 k after 19 years i doubt it very much so if its gonna make another 13k within 6 !!!
wots everyones thoughts please ?
thanks in advance
(hope ive made sense)

Dave_PiFS

You have a few options to consider.

1) convert the full mortgage to repayment so you have the certainity of the mortgage being repaid. You could maintain the endowments as seperate savings plans if this is affordable on top of the higher mortgage costs.

2) Keep the mortgage part and part but reduce the Interest only portion to takeaccount of the shortfall (or the current guranteed minimum maturity value if With profits). Still some risk with this depending on the endowmwnt type and provider.

3) surrender the endowment(s) and reduce the mortgage balance and convert all to repayment.

You need to find out the current surrender value, any guaranteed maturity amount, if any, (if traditional with profits, sum assured and bonuses to date), cost of plans to maturity.

With this you will be able to work out whether it is worth keeping the endowments going or surrendering and repaying part of the mortgage. You may also save on interest payments by reducing the mortgage balance.

Hope this helps

EdInvestor

Post some more info

Provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity forecasts
Interest rate payable on mortgage(s)

strugglinon

thanks for your reply...
basically we have 2 endownments running side by side as one was a top up when we moved...
one is 10200 the other 6800....
the first needs to reach 24800 (within the next 6 years)
the other 18600 (within the nxt 6 yrs)

we did reduce the combined balance by 5 k last time so they only need to meet 30k between them...
i dont think convertin it all to repayment and keepin the policies is a viable propersition at the moment as it will be too much per month to repay..
so we,'re toyin with cashin them in and pay proceeds off mortgage to reduce it then hav rest on repayment or..............
take more on a repayment so we drop the figure to 20k on int only, hoping the now 17k endowments make 3k between em in the nxt 6 yrs...

thanks

strugglinon

maturity on the 18600 is 2015..
figures givin by provider..
low growth 9820 med 10700... high 11700 total future payment unde plan is 2067

final bonus 455

unit linked with profits... not sure of other policy figures as yet but thats the same unit linked with (ahem) profits....

EuroMillions_2

Hi,

Your help please.

We have 3 endowment plans, 2 of which were assigned to the Building Society.

Thankfully, we were able to pay-off our mortgage 4 years ago so we now own our property and hold the deeds, etc.

Owing to cash flow problems, we are considering surrendering the plans and have received quotations from the Insurance Company.

However, they have stated that the claim forms must also be signed by the Building Society.

Surely the Building Society should have notified the Insurance company to release the assignment when we settled the mortgage in 2006?

What should we do?

dunstonh

What should we do?

ask the building society to confirm in writing that they have no requirement or claim on the policies any more.

EdInvestor

strugglinon wrote: »

maturity on the 18600 is 2015..
figures givin by provider..
low growth 9820 med 10700... high 11700 total future payment unde plan is 2067

final bonus 455

unit linked with profits... not sure of other policy figures as yet but thats the same unit linked with (ahem) profits....

Please post the info on both policies as per list.

madmizzy33

Help Please.
I have 2 endowments. Both Failing.

1st one.
Provider Aviva.
sum assured £12,000
Surrender Value £6,000
Premium £30 Per month
Maturity Date Aug 2015
Forcasts £8,800 @ 4%, £9,700 @ 6%, £10,700 @ 8%.
They say a 3.61 % final bonus.
Interest rate on mortgage 0.69%.

2nd endowment
Provider Pheonix
Sum Assured £22,150
Surrender Value £9,309
Premium £54.91 per month
Maturity June 2015
Forcasts £13,800 @ 4%, £14,700 @ 5%, £15,800 @ 6%
Total bonus so far £1,973
Interest rate on mortgage 0.69%.

I am paying off more each month but, would like to know wheather to cash in or leave and hope for the best.. many thanks

EdInvestor

madmizzy33 wrote: »

Forcasts £8,800 @ 4%, £9,700 @ 6%, £10,700 @ 8%.

If you cashed the policy in now and used the amount to reduce the mortgage, also increasing the monthly mortgageg payment by the amount of the endowment premium, you would likely lose out at maturity (though only by a little) becuase the mortgage interest rate is so low.On the other hand you would incur virtually no risk of a shortfall, and this may appeal to you.

2nd endowment
Provider Pheonix
Forcasts £13,800 @ 4%, £14,700 @ 5%, £15,800 @ 6%

Similar result with this one, but the loss would be higher.

Suggest you do nothing at present but review the position when your mortgage interest rate goes up.

dunstonh

The Aviva endowment probably has a mortgage promise value with it which would be paid on top of the maturity value if it falls short of target. What is that value?