Aviva Endowment - Advice of whether to Surrender - Completely lost

dunstonh

Ok. So add that £5670 to the three projections.

4% = £33470
6% = £40,000 (capped by target amount)
8% = £43,500 (no mortgage promise value payable as it exceeds target amount).

6% is not an unreasonable figure to go. So, this endowment is on track, mainly due to the MEP.

ukcarper

This is what happens when an Aviva endowments matures you get

Sum Assured + any regular bonuses (total bonus) + a final bonus + mep

The final bonus is not guaranteed but the total bonus is. The mep is not guaranteed but Aviva have said they will give 3 years notice if they are going to withdraw it.

My Aviva endowment has just matured and it did not make the 4% figure in fact it has only paid out £15k including a promise of £2.3k instead of the £20k it was targeted to pay. Of course it has matured at a bad time and things could improve in the coming years. The other thing to remember is that there is life cover included with the endowment.

dirk_

Hey Guys

Thanks for the responce's

My original plan was to surrender/sell the endowment and pay the majority of the cash into my mortgage and then also increase the monthly mortgage payment by £100.00 (Already did this last year and am, looking to do it again)

Mortgage amount is currently £77,000.00 (House Value + £ 125,000.00)

Would I be better off (in the long run) allowing this Endowment to mature (With the info available today)

Again thanks for everyone time and help :beer:

ukcarper

What you really need to do is work out how many payments there are left on the endowment and multiple that by the £65 your paying, then work out how much interest you will save on mortgage by over paying that £65 and add them to your surrender value.

Then you have work out minimum the endowment will pay out that will be

Sum assured £14538 + present bonus £3033 + mep £5670 = £23241 the mep is not guaranteed but I don’t see any reason why they would stop it.

You will probably get more yearly and a final bonus added to the above figure that’s where the 4% 6% and 8% figures come in. It is very difficult to know what one will be right I would use 4% but that’s based on my personal experience dunstonh is a financial advisor and he said 6% sounds ok.


Then you have to compare the two figures and see what you think bearing in mind that I you surrender the figure is guaranteed but if you don’t there is an element of guesswork.


The other thing is that the endowment will include life cover.

dunstonh

I would use 4% but that’s based on my personal experience dunstonh is a financial advisor and he said 6% sounds ok.

Only on the basis that we had a major drop. So, ongoing 6% seems more reasonable. If we were back at say 7000 on the FTSE100, then 4% going forward would seem more reasonable.

ukcarper

dunstonh wrote: »

Only on the basis that we had a major drop. So, ongoing 6% seems more reasonable. If we were back at say 7000 on the FTSE100, then 4% going forward would seem more reasonable.

That’s the problem isn’t it you probably do have more idea then me and as I said earlier my endowment did mature at a bad time but that’s the call the OP has to make.

I kept mine going because of mep, I dont think he has said how long it has to go but £5670 is a lot of £65.

dirk_

hey there

thanks for the info

I will do some maths tonight

The endowment has 14 years left to run - so works out that I will pay out £ 10,920.00

I will do the sums later tonight and see what I come up with

dirk_

Morning Guys

Well I have had a response from both LSA & AAP, neither one can beat the surrender value quoted by Aviva.

I will be getting a hold of the Abbey (Mortgage Provider) when they open after the Easter hols to see if they can give me figures on what increasing the monthly repayments & also paying the Aviva surrender value to the mortgage, will do to
a) the monthly repayments
b) how much interest we will save by doing this

honved

I'm also an Aviva endowment customer.

The details:

25 year endowment, ending 2017.

£67 pcm

Mortgage currently £22,000

2009 figures:

Surrender value £15,300
Projected final amount: £32,300 (6%) + Promise £12,269
At 4% £28,000
At 5% £30,100

I've already received £4,500 as a result of a mis-selling claim - this went towards repayment of the mortgage capital.

Now, my assumptions from reading the thread are that I should definitely keep the policy to maturity, based upon the following:

I'll pay in approx. £5800 if I keep it. Even without the "Promise", at a 4% projection I could receive considerably more than I pay in - but I'm not really clear on the risks here.

I could easily pay off the mortgage, but the property is let now (though it used to be my primary residence), so it is not tax-efficient to do this.

My mortgage is a lifetime tracker, at BBR+1.75, but as mentioned above I can pay it off if IRs sky-rocket.

Another note: I switched mortgage providers some time ago. My understanding is that this does not affect the "Promise"? (EDIT: confirmed by Aviva)

So, I think I'm fairly safe and not in a bad position??

ukcarper

My endowment that is just about to mature was £43 per month for 20 years will pay out including promise £15k and I don't think it could have matured at a worse time, mind you you never know. I work out that if you surrender and save that and future £67 in seven years you will have about £25k at a 3% savings rate.

My promise was only £2,300, £12,269 seems very high is it right and what is your sum assured, your not confusing the two are you.