Worried and need advice please!!

madmaiden

Pleased help!!

Would be grateful if anyone out there could give me advice! I have tried posting on the endowments area but no one has replied so maybe I put this in the wrong place - apologies if I am wrong!!

We currently have debts of around £15,000 which has been a major headache! We did remortgage about 2 years ago but due to redundancy and unforseen circumstances seem to be back to square one again with credit cards etc. Have managed to get most of this on to low rates either 0% or 5.9% but the payments are crippling and there is never enough money!

What I really need to know is do you think it would be wise to cash in our endowment that has 7 years to run to pay off most of this and start again or should we plod on?

Here are the details of the endowment and I would be soooo grateful if someone out there could advise me as I just don't know whether this would be a good idea - in the past keep seeming to have made the wrong decision at every turn.

Have already changed to a repayment mortgage which stands at £89,000 over 18 years. In theory if we had been good with money could have paid off in 2013! - feel very stupid!

Here are the details
Legal and General policy

Basic sum assured 10,557.00
Guaranteed life cover 34,500
Existing bonuses 7,065.10
2005 annual bonus rate applied to sum assured 0.75%
2005 annual bonus rate applied to existing bonuses 1.25%
Bonus added for 2005 167.50
Total basic sum assured and annual bonuses to 2005 17,789.60
Current final bonus rate 76%


We did have a quote back in 2004 for selling up which was at that time offering £11,500.

Very unsure what to do whether to try carry on battling with debts or sell up and try to start again. Is it worth paying in to this while the debts mount up?

Thanks very much in advance for any help given!!

pandaonmyshoulder

It's always been said to be "bad advice" to tell someone to cash in an endowment but I think it's up to the individual. I cashed in my EA several years ago as I realized it wouldn't pay out enough to repay my mgt (used to work for a Life Assurance Co) and the broker at the time spent hours on the phone trying to get me to change my mind (wish I'd kept all the blurb now 'cause I could try and take him to the cleaners). We switched to a repayment mgt and I honestly believe that we did the best thing for us and it's much nicer to see the amount you owe reducing with a repayment mortgage all be it slowly.
Although having said that you only have 7 years left, how much is it projected to be worth in 7 years?

CLAPTON

the first and most important thing is to be in control of spending. the great danger of 'consolidating' debts into increased mortgage is that this does not address the underlying spending problems and only provide tempory relief before the debts build up again.

i would suggest you firstly post a Statement of Affairs (SoA) on the board and see whether people here and help.
see this for more details
http://forums.moneysavingexpert.com/showthread.html?t=107280

on the matter of the Endowment :
suggest you get a quote from the company as to the current cash in value.
also get a quote from idependant broker as they generally offer higher pay out.
Is your current mortgage fully repayment now so the endowment is not required to pay off any parr of it?
if the mortgage repayment is catered for then it makes sense to pay off the debts with the endowment...essentially you are currently borrowing money on CC in order to save for the endowment.

madmaiden

Hi
thanks so much to both of you who have replied.

I am going to try and call L&G tomorrow morning to get a quote on how much this policy would be worth.

The projection for 6% is 30,000, and for 4% it is around 26,000 - I just feel that if we keep paying in to this although it seems so near the end the other debts will just keep mounting up and, as you say, it could mean that once that amount comes all we will be doing is paying off credit cards. I feel so annoyed that we have got into this predicament!

We have changed our mortgage totally to repayment and have full life cover on it so although we have 18 years left to go now instead of 7 if we could get the debts paid off we might be able to pay more off the mortgage once the kids get jobs (ha ha).

Just so stressed out with it all! But I can see that if we don't sort this out now we are going to have a very poor old age!!!

Thankyou again!

lynzpower

Hello darling

SOunds like you re in a right old tizz sending a hug

This is just my opinion here, and Im giving it with the nicest of sentiments, but I do suggest, NOT cashing in the endowment, and using it to pay off your debts. I dont know enough about them at all, so I wont comment on their return etc.

But I will say you have 15k on 0% and low LOBs. Id make the most of this and possibly save the endowment for what it was originally used for, if not cash it in and save it somehwere on a better return ( as I say i dont know enough about these)

There are plenty of people here plodding on and paying them off and as I dont know what you earn I wonder how insurmountable paying them off really is. I again dont want to sound harsh here, but are you looking for the easy way out. Im not flaming you , Ive done it myself with consolidation loans, of thinking wow this is a fairly instant "solution". If youve already remortgaged ( another solutoin) then this option doesnt again seem much different.

If you pop up an SOA youll see that there are options for reducing your outgoings and optimising your income. If you are looking for inspiration have a nose at ehalllets "can I clear a debt a month" or jamie dodgers debt diary, posters who are quite frankly an inspiration in getting the debt swiftly cleared with purpose and humour. Add into the mix literally loads of us sharing tips, helping each other out and being around for virtual hugs and youve found the most supportive place on the internet
Love
Lynz
x

madmaiden

Aw thanks so much for that - I have been stressing about this for so long it's not really something you want to admit to is it? I know that I am not the only one but sometimes it just seems impossible. I am going to mull it over when I get the figures.

At the moment paying out any more seems impossible as each month there is less and less money around to manage! I think food bills are the worse have been trying to tackle but always running out of things! - 3 kids never stop eating!

Also my son has just left college and has no job (although trying very hard!) and one just left school.

lynzpower

Madmaiden

Do an SOA. If theres no leverage in it, then fine. But you cant say youve not tried can you?

And I can also say that since I came here a few months ago, we havent seen many SOAs where theres literally no cutbacks to be made

Anyway, youve found us now. In all honesty I doubt I woud have been able to get out of debt on my own, and all these lovely peeps here make it happen for me, along with a bit of effort on my part to

wannabedebtfreebeth

If you do decide to get rid of the endowment policy I think you would be much better selling it than cashing it in - there's quite a good market for these as whoever buys then pays until it matures so they get a good deal and that;s reflected in the price you get from them. If you put "selling endowment" into google and click the uk only button about 5 or 6 entries down there is a bbc news page giving several addresses for this.

madmaiden

I feel so much better since I wrote this post. It's lovely to think that there are so many helpful people out there!

I will try and do the figures - I have tried to stick to a budget since I don't know when and it always goes wrong.

Actually last month I have written everything we spent in a book but have not even looked at it since - I think it is fear - as I know it is going to be really bad on paper!

Well we will see!

lynzpower

Good stuff!
Hope to see more of you round here

madmaiden

Well I have had a little look and here goes fingers crossed!

Monthly Incomings:

My salary - £1,250.00
Partners salary - £820.00
Child Benefit - £115.00

Total - £2,185.00

Monthly Outgoings:

Mortgage/Rent - £636.00
Council Tax - £105.00
Water Rates - £29.68
Gas - £50.00
Gas Contract (Service): £23.11
Electric - £30.00
TV License - £10.99
NTL bill – around £80.00 (TV/telephone/Broadband)
Food - £500.00
Petrol - £130.00
Life Insurance £29.68 + £12.00 = £41.68
Lottery - £18.00
House Insurance/buildings - £38.33
Endowment payment - £53.30
Club Book payment - £35.00
Hospice lottery - £4.00
HAS payment – £37.28
Cover plan for cooker - £5.50
Savings - £20.00
Daughters bus fare - £40.00
School dinner money - £30.00
Milkman - £12.00
All other things £100.00

Total - £2029.87


Debts

Mint card – 0% until November £4836.00- payment - £107.00
Cahoot Loan – 5.8% - about 6 years left - £6,330.01 – payment £98.20
Barclaycard – 5.9% life of balance - £3,893.13 – payment £80.00
Morgan and Stanley – 5.9% till November - £4850.00 – payment £110.00
Egg Card – 15.9% £300.00 – payment - £10
Overdraft - £600.00 – not too bad as low as long as stay within limit
Club book - £100.00 - p

Total: £20,909.14

As you can see this leaves £155.13 to pay all my other credit cards off which is not enough!

Thanks for looking!