Zurich endowment shocker

kazzy20a

I have a Zurich adaptable endowment plan which was originally taken out via Allied Dunbar and was passed to Zurich later on.

Taken out in 1989 to cover £55000, current payment £106 p/m includes critical illness cover.
With 4 years left to go the surrender amount today was just about £29000

Zurich have indicated that the fund will grow at 4%-6% between now and the full term with a predicted £36000 end value at the worst figure ie 4%

My dilemma is this, my mortgage of £90000 is due to come of its current reduced rate in November do I cash in the policy now and pay a lump off my current balance and re mortgage at £61000 or do I let it run for 4 more years and hope that it exceeds the £36000 they predict, bare in mind that I will pay another £5000 in payments between now and then

This is my first post and I hope this makes some sense
Thanks

JA1000

Would you save £2k in interest over 4 years on the mortgage from this amount in 4 years.

Also why like everyone else are you in a rush to remortgage what is your SVR?

kazzy20a

JA1000 wrote: »

Would you save £2k in interest over 4 years on the mortgage from this amount in 4 years.

Also why like everyone else are you in a rush to remortgage what is your SVR?

Hi I'm not quite sure what u mean about the £2k interest saving

my 3 year reduced rate ends in november so I have to do something.

JA1000

What does your rate revert to - does it go up or down?

By paying off your mortgage will you save more in interest than the £2k you will gain from the endowment after payments.

kazzy20a

rate will go up , not sure yet by how much depends on the best deal I can get in nov.

yes by paying off £29000 i will save more in interest over the 4 remaining years.

JA1000

kazzy20a wrote: »

yes by paying off £29000 i will save more in interest over the 4 remaining years.

More than the £2k increase in value after payments to the endowment?

dunstonh

Zurich have indicated that the fund will grow at 4%-6% between now and the full term with a predicted £36000 end value at the worst figure ie 4%

They are not indications or predictions. They are FSA mandated examples. You could get back more or less than that.

Funds that grew by 40% last year still have to use 4, 6 & 8%.

kazzy20a

Thanks for your post , this is my problem I have been advised that with markets being low over the last year or so my premium has been buying more shares for the same money, and as such may now gain in strength. do endowments pick up the speed with which they accrue funds as they reach maturity.

do I cash in or stick with it for 4 more years?

JA1000

What about any guarantees?

kazzy20a

sorry im a bit ignorant about these
things what are guarantees

dunstonh

What investment fund are you in?