Countrywide Assured Endowment

Aaagh

We switched our mortgage to a repayment from endowment a few years ago but kept the endowment with Countrywide Assured as a kind of savings plan.

However, we have had a baby (now 14 months old) and I now only work part time and at £130 a month we just can't afford to keep the endowment, as we would like to move to a bigger house in a year or so and will need it for the increase in mortgage payments.

The target amount on the endowment is £48,163, remaining term 17 years and 9 months. We have been told the projected amounts are 4% growth = £27,400, 6% = £37,800, 8% = £51,900.

My dad advised me not to cash it in but just keep it 'on hold' as then whatever we have paid in so far would still be invested. Countrywide Assured have sent me the paperwork to do this saying that the minimum premium would be £20 per month (death benefit £1000!) and a monthly service charge of £2.68. This seems extortionate to me, as I have been quoted by a different company for £150,000 life assurance at £17 per month.

Should I just cash it in instead? I haven't asked them yet what that value would be, as I thought it would be a pittance and not anywhere near what we have paid in.

I can't claim for a missold endowment as although they did do the usual 'you'll pay off your mortgage and get a huge lump sum' they did tell me that there was a possibility of it not hitting the target and I remember signing paperwork to say we were aware of that.

Any advice would really be appreciated. Thanks.

dalia_2

I'm no financial expert but we were ina very similar situation as yourselves regarding this and this is what we did.
Even though I also remember signing something similar about the risks we still complained and managed to get over £3000 compensation for the policy being missold. We just complained to the company that sold it to us and it was all very straightforward. This was on the basis that the risks were not explained properly.

The other advice we were given was to try to let the endowment run its term and pay what you can if possible as some bonuses accumalate near or at the end of the term.
If like us you don't have a lot of savings or pension for the future at least this is one policy where you can expect to get some savings together.
I've also heard people say that you get more cash by selling it rather than surrendering to the company who sold it and that means approaching another company who specialises in buying current endowments.
I also asked for a surrender value at the time and ours has 13 years to run and we pay £70 per month and it is now worth about £10000.
It was due to pay a £40000 mortgage in 13 years so has not really been very
good for us.
We have now decided to move on a repayment mortgage and will just let ours run as advised.
Hope that helped a little.

EdInvestor

Aaagh wrote:

My dad advised me not to cash it in but just keep it 'on hold' as then whatever we have paid in so far would still be invested. Countrywide Assured have sent me the paperwork to do this saying that the minimum premium would be £20 per month (death benefit £1000!) and a monthly service charge of £2.68. This seems extortionate to me

You are quite right.

Should I just cash it in instead? I haven't asked them yet what that value would be

Probably.Ring up and get the surrender value and we can check.Is this a unit linked or With profits endowment?

EdInvestor

My dad advised me not to cash it in but just keep it 'on hold' as then whatever we have paid in so far would still be invested.

The other advice we were given was to try to let the endowment run its term and pay what you can if possible as some bonuses accumalate near or at the end of the term

Just a general note - this kind of advice was sensible up to about 5 years ago, but it's no longer applicable as a number of things have changed. More often than not these days it's better to surrender the endowment and use the money to reduce the size of the mortgage.

Making a policy "paid up" ( ie ceasing payments but not cashing it in) is definitely not recommended unless you would have seriously difficulty replacing the life cover at reasonable cost.

Aaagh

Thanks for your replies. I have phoned them and asked them to send me the surrender value as I'm thinking that will probably be the best option now.