Aviva with profits Endowment 12yrs to run - stay or go?

RJRock

Help!

We are 13 yrs into a 25yr endowment which was set up to cover 61k our mortgage.
We went repayment some years ago when the red letters appeared but maintained our monthly endowment premiums. 96.20. as a kind of savings plan.
Our last surrender value at the end of last year was quoted at 11,343.
We reckon it may be worth it if we dumped this amount into a savings account for the next 12 years and continued 96.20 into said account. If we averaged 3% AER for 12 years we get a return of 33k.

Versus 61k original amount, would this be a good plan or would Aviva likely perform better?

Any advice greatfully accepted.

HarveyGal

Hallo RJRock

I am a newbie to these boards and am learning a lot reading them...so someone with more knowledge could help more.
I too have an Aviva with profits endowment and I thought I would mention this: I get a letter once a year informing me of the guarenteed bonus on my policy. This is not the same as a surrender value. I have asked Aviva in the past for an estimated surrender value and it was about 15% less than my guarenteed bonus.

I have considered whether I should cancel my policy and you have to do some sums...how much it costs to continue the policy (interest payments and payments to Aviva)...and then speculate as to what you might get out at the other end :guarenteed bonuses plus final bonus plus Aviva have said there is a possibility of some compensation-type payment .

This compensation-type payment might be upto £8.8K for me, the maximum being fixed at the endowment policy shortfall at 1999 (when the shortfall was first identified I think). Aviva will decide three years before the policy finishes whether they will make the additional payment (and maybe how much?).

I think this is right, without pulling my papers out. Just so you know, surrender value is not the same as bonuses awarded.

Hope someone else can offer more advice.

dimbo61

What interest rate are you paying on the mortgage right now ?
Are you in a fixed rate deal ? and are you allowed to overpay ?
What would happen IF you cashed in the endowment and paid that off the mortgage then increased the mortgage payment by £96.20 each month!

mummyofonechild

What Dimbo has suggested to you is exactly what I have just done. I will be saving 4.5 years in mortgage and interest payments :j Its worth considering as an option.