Current Norwich Union Endowment Yearly Growth Figure

tonycarew

I contacted Norwich Union earlier today for settlement figures relating to the 3 mortgage endowments I have with them.Bearing in mind that the smallest yearly growth rate they use to forcast shortfalls is 4% I asked the gentlemen I spoke to what was the present yearly growth figure.After requesting assistance from his collegue he stated that it is infact minus 12%.This surprised me as I thought rather nievely as it turns out that it would have been a positive % ammount even in todays climate.....
Just for anyone who may have been interested!

dunstonh

This surprised me as I thought rather nievely as it turns out that it would have been a positive % ammount even in todays climate.....

Fixed interest funds dropped 20-40% last October. Stockmarket dropped 45%. Property has dropped over 50% in last 2 years. Even cash made some losses as institutions dont benefit from the FSCS in the same way individuals do.

You dont say what investment funds you are in but with a couple of exceptions, you would have your money in those areas. So, a loss of 12% seems quite good.

There has been some recovery in fixed interest and stockmarket recently so expect to see returns to exceed the 4% this year (on most funds) if that continues. Property is still flat though but it has stopped dropping.

tonycarew

Thanks for the reply Dunstonh,I wonder if you could answer a question for me.When I contacted Norwich Union today I asked for and was quoted 3 surrender values one for each policy.Would the stated surrender value for each policy have included the Norwich Union endowment shortfall promise amount,or is this an addition only paid at maturity?

dunstonh

Would the stated surrender value for each policy have included the Norwich Union endowment shortfall promise amount,or is this an addition only paid at maturity?

it is only included on maturity and not any running value. It is only paid on maturity and not surrender.

pawpurrs

wonder if any one can help me both my husband and I have a duel plan endowment with avira, its in the with profits fund 2. It was taken out in august 1999, and was for a 25 year term. Both plans were to pay off approx 40k each.
I have today got a surender value of £8.5k, each, obviously that could be higher if I sold them on the open market.
There was a promise made that they would top up the plan if average returns were 6%, on the amount dec 1999, what does this mean exactly, and is it likely to apply or have any weight?
Would it be a bad idea to cash them in now, or to stop payments and freeze the account, trying to work out what to do for the best? it does seem unlikely that they will achieve the amount needed to clear the mortgage?

dunstonh

what does this mean exactly

Whatever the shortfall position was on the 2001 statement (from memory it was 2001) Aviva promise to add that figure to the maturity value if it falls short on maturity (to a maximum of the target amount or that figure whichever is lower).

is it likely to apply or have any weight?

In a decision to keep or surrender then absolutely. Some promise values are in the tens of thousands of pounds and can swing the decision to keep or get rid of.

I dont know if buyers though price them higher for the promise value. I suspect not.

Would it be a bad idea to cash them in now

Depends on the values and the promise value and what happens in the future and what you would do as an alternative with the money.

or to stop payments and freeze the account

You lose the mortgage promise value if you make it paid up.

it does seem unlikely that they will achieve the amount needed to clear the mortgage?

I wouldnt say that. You missed most of the issues with the dot.com drops and paid in a fair bit before the growth peaked. Its suffered in the recent drops but you have enough years to benefit from lower investment prices. Yours will be unitised so your final bonus will be based on your investment period and not so much with legacy issues.

pawpurrs

Thanks for your swift answers. It does appear that if there are no funds left, that the promise may not apply when my policy matures. As I took out the policy at the end of August 1999, and the promise was for the shortfall in December 1999, my promise, cant be for much can it?
If you were advising me as a client, would you advise me to keep the policy, and carry on making payments? Thats what I need to know, dont worry I wont hold you to it!
The promise is only good if returns average 6%, which they clearly arent, and if Avira can afford the payments, so this promise isnt exactly rock solid is it? Or have I misunderstood?

dunstonh

It does appear that if there are no funds left, that the promise may not apply when my policy matures.

If Aviva do not exist as a company when your maturity is due then its a possibility. However, you are talking about one of the largest insurers. Whilst failure is not impossible, it is likely to get the same treatment as the banks given the damage to the economy that would occur.

As I took out the policy at the end of August 1999, and the promise was for the shortfall in December 1999, my promise, cant be for much can it?

I have learnt never to assume. It potentially could be as your target growth rate may be 7% for example but the illustration 6%. So, by default the 6% figure would always show a shortfall.

If you were advising me as a client, would you advise me to keep the policy, and carry on making payments?

I cant answer that. Liability exists on comments I make on the board as much as if I was doing it formally. I dont have the facts to answer the question. Some endowments are obvious that they should be dumped the minute you mention their name. However, Aviva ones are not as obvious as some should be kept and some dumped. So, I cant apply any hard and fast rule to yours.

The promise is only good if returns average 6%, which they clearly arent, and if Avira can afford the payments, so this promise isnt exactly rock solid is it? Or have I misunderstood?

You have misunderstood. The shortfall payment was based on the 6% projection figure. However, if it doesnt achieve that it doesnt matter. You still get the promise value up to a maximum of that figure. The 2004 statement (Again from memory) should confirm the capped figure.

The promise is fully funded at Aviva and there is nothing to even hint at it being withdrawn.

EdInvestor

pawpurrs wrote: »

I have today got a surender value of £8.5k, each, obviously that could be higher if I sold them on the open market.

Get quotes here: https://www.apmm.org

Would it be a bad idea to cash them in now..

Post some figures so we can see

Surrender value
Monthly prermium
Maturity date
Maturity forecasts
Interest rate payable on mortgage

pawpurrs

EdInvestor wrote: »

Get quotes here: www.apmm.org




Post some figures so we can see

Surrender value £8413.64
Monthly prermium £70.00
Maturity date 26 Auguat 2024
Maturity forecasts at 4% 25400
at 6% 32000
at 8% 40,400
Interest rate payable on mortgage

At the moment not applicable STR, buying when the right property comes available

has the promise that the maximum it a shortfall could be reduced by a maximun of 8495, dependant on free reserves/

EdInvestor

pawpurrs wrote: »

At the moment not applicable STR, buying when the right property comes available

Please choose a likely interest rate (either mortgage or savings)that can be used in the calculation.