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Continue with endowment or open an ISA ?
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Posts: 23 Forumite
Hi. My (Abbey Life) endowment policy matures in 2 weeks. They have sent me a letter saying that I now have several choices: They can give me the whole amount (about £13500), or I can leave the money in the policy, or I can have some of the money now and leave the rest in the policy. If I leave some/all of it in the policy, I have the choice of continuing to pay into it each month or stopping the payments.
I've got about £11000 left on my mortgage, but it's a flexible one (with Abbey/Santander), which I don't have to pay off yet if I don't want to.
I was thinking that it's worth paying most of the mortgage off, (leaving a bit in there because as long as I have this flexible mortgage running, I can increase it to about £80K without any questions or reassessment).
So for instance, if I pay £10K off the capital of the mortgage this will leave me with a £1K mortgage (which I would keep running to give me flexibility). That would leave me with about £3500. Should I leave this in the endowment policy or put this in a Savings account? (or an ISA).
As Abbey Life's performance has been cr*p (falling about 33% short of the 20k target), I am inclined to go for the latter option, but it has been suggested that the endowment policy should start to perform better over the next few months as we (hopefully) come out of recession, (?).
I would appreciate any advise/input.
Thanks.
I've got about £11000 left on my mortgage, but it's a flexible one (with Abbey/Santander), which I don't have to pay off yet if I don't want to.
I was thinking that it's worth paying most of the mortgage off, (leaving a bit in there because as long as I have this flexible mortgage running, I can increase it to about £80K without any questions or reassessment).
So for instance, if I pay £10K off the capital of the mortgage this will leave me with a £1K mortgage (which I would keep running to give me flexibility). That would leave me with about £3500. Should I leave this in the endowment policy or put this in a Savings account? (or an ISA).
As Abbey Life's performance has been cr*p (falling about 33% short of the 20k target), I am inclined to go for the latter option, but it has been suggested that the endowment policy should start to perform better over the next few months as we (hopefully) come out of recession, (?).
I would appreciate any advise/input.
Thanks.
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Comments
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The Cash ISA WILL pay you at least 3% tax free and you should be building up you ISA savings now you have nearly cleared the mortgage.
You can put £3600 in now if under 50 and £5100 if over 50
After april 5 2010 you can put another £5100 in a cash ISA ( EACH ?)
Get rid of the endowment and save into ISA,s while running down the mortgage balance to say £100 over the next 5 months0 -
An ISA - either cash or stocks and shares - is a better choice than staying with the endowment because it is fully tax free and contains no extra charges for things like life cover which you presumably no longer need, if you ever did.
Use a discount broker to get charges rebated if you want an investment ISA.Trying to keep it simple...
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