Endowment - Unemployed - Advice?

Murff

I have recently become unemployed as I am in the house building industry and now I have spare time I want to sort through my finances. I was hoping someone could make some suggestions about my endowment policy.

My flexi mortgage is £57,000. Split £15K repayment and £42K I/O. I have a with-profits endowment running to pay this off.

Provider: AXA - Sun life
Start Date: 1999
Maturity Date 2024
Target £42,000
Life Cover £42,000
G'td Maturity Value: £25,945
Premium: £77.78 per month
Projected 4% = £32,300
Shortfall -£10,064
Projected 6%
Excess £9,636
Surrender value today: £8444 (inc. all bonuses.)
It is now over 10 years old.
10 years premiums at £77.78 = £9333
Interest rate on tracker mortgage is 0.65% above BOE Base rate. (1.15%)

I am thinking it is better to convert into a complete repayment mortgage and use the endowment monthly premium to pay the new increased repayment premium. Use the lump sum to reduce the mortgage.

It seems I cannot take a payment break from my endowment, only make it "paid up"? and I would no longer have life cover. If I change it to repayment at least I could take a payment break on my mortgage without penalty.

I am looking at starting a separate life cover policy to cover the complete mortgage anyway, for my partner.

I am unsure what to do for the best? Do I cash it in?

dunstonh

Are you going to be on means tested benefits? Endowments are not included in the means test. So, that can be an advantage.

What would be the monthly repayment on repayment basis if you did switch over?

Murff

I am claiming Income Based Job Seekers Allowance.

The monthly payment when converted to repayment mortgage is £240/mnth approx.
Current payments are £87.75 R & £40.25 I/O (£128)

I am looking at this for the long term benefit rather than this period.

I am hoping to get any job real soon.