Zurich endowment shocker

kazzy20a

apparently according to my paperwork its a
Managed 3/4b al

Gorgeous_George

I'm firmly in the 'a bird in the hand' camp.

That said, I'm neither a financial adviser nor an endowment salesman. You need to seek advice but in the end, you must decide what you want to do with your money.

You could...
1. leave it where it is and continue paying into the policy.
2. cash in now and invest in the stockmarket.
3. cash in and pay a lump sum off your mortgage debt.
4. other stuff.

Which option you choose is a personal choice but my guess is that you will only be disappointed if you keep it and it performs badly. Cash it in and you'll never know but you'll be able to say that you took responsibility for your finances.

I don't think you would regret paying a lump sum off your mortgage. Whatever happens to the fund, your mortgage will be much smaller.

GG

dunstonh

kazzy20a wrote: »

apparently according to my paperwork its a
Managed 3/4b al

These are the annual growth rates
2006: 9.71%
2007: 9.37%
2008 -17.05%
2009: 15.90%
YTD: 5.28%

So, you can see that going by the 4,6 &8% projections doesnt really help and thats why providers wont tell you which they think it will be. The fund has already recovered and past it's pre crash price.

Have you had recent values and projections? Have you compared those to last years?

kazzy20a

Thanks for those figures it looks as if it is performing ok at the moment . At its worst about a year or so ago it was worth about £19000 and as of yesterday it was almost £29000 , I have managed to find the current figures on the zurich website but i'm not very good at interpreting them.
Question is should I stick with it for 4 more years and hope it pays dividends ?

Gorgeous_George

Depends if we have four years like 2008 or four years like 2009. As 2008 and 2009 were extremes I'd guess four years at the average of the last four (2006-2009 inclusive)...

...or 4.4825% to be precise would be as good a guess as any (this makes the 4%, 6% and 8% quite optimistic and misleading).

If your mortgage rate is higher than 4.4825% you may do well to cash it in and pay a lump sum off your mortgage.

It is a gamble and only you can choose which horse to back.

GG

dunstonh

Long term average on balanced managed funds is around 7%p.a. As GG says, its an unknown. Given where we are now, 8% seems more reasonable than 4% but it could be higher or lower. Just think if you had called it a day a year ago? The problem is that next year could see another £10k added to it or another 10k wiped off it. We just dont know.

kazzy20a

Thanks to you both , the one thing I have realised about all things financial is its a big gamble . usually with no definitive right or wrongs

dunstonh

kazzy20a wrote: »

Thanks to you both , the one thing I have realised about all things financial is its a big gamble . usually with no definitive right or wrongs

Welcome to the world of financial advice. So much of what we do is a judgement call.