grateful for any advice

triplefin

Hope someone can help with some advice here. ???

I am in the fortunate position of no longer having a mortgage. However, I still have an endowment policy running. This has another 12 years to run with an ‘estimated’ payout of between £37,000 – £42,000.

Surrender value at present would be £13,443.
As I am paying out £99 per month to ‘feed’ this and knowing that endowments are no longer good long term investments would I be better:-


a)surrendering the policy and investing elsewhere
b)wonder whether buying a small property to let would be a good/best long term investment ie 13,000 as a deposit with the £99 monthly payout contributing to a small monthly mortgage. (was thinking of buying property up north).

I know property is not a quick payback investment and was thinking long term ie pension age. I am 45 at the moment.

dunstonh

As I am paying out £99 per month to ‘feed’ this and knowing that endowments are no longer good long term investments would I be better:-

They are not as good as alternatives available but the difference is not always that great. Indeed, if you are a higher rate tax payer, the endowment could be more favourable.

It's mostly down to the funds. A life fund (used by endowments) will often be about 0.5-1% pa less on it's returns than the same fund as an OEIC or Unit trust. So, if you are going to surrender and pay a big penalty, it may be more advisable to find out what alternative funds are available and the cost of switching and/or redirecting future premiums.

Obviously there are other costs to consider, such as life cover and plan fees.

So, its a case of seeing what you lose if you surrender against what you gain if you hold on.