bid drop in NU projection.

ibinns

Hi,
I'd just like to know if this is the "norm".
I have a 25 yr NU (Aviva) endowment policy due to mature next year.
It is £22/month & the target on maturity was £17500k.

The projected payout last July at the mid-point of 6% was £15500, Six months on this has now reduced to £14500, a drop of 7% in six months- even though equities (albeit a small part of the fund) have risen.
Is this to be expected? -I have heard reports of payouts decreasing rapidly towards the end of the term. Can I request more detailed explanations from NU ?


Thanks

IB

dunstonh

-I have heard reports of payouts decreasing rapidly towards the end of the term

They can go up or down. There is no trend. It depends on the value of the underlying assets.

If you are in the with profits fund then there is often a lag on these. So, the recovery from May to October may not yet be factored into the returns.

However, its more likely that it didnt achieve he mid rate growth last year so you would expect the mid rate and high rate projections to reduce in value. How did the lower rate projections compare? Also, did they use the same projection rates. Aviva have changed the projections periodically so that can confuse.