advice on surrendering my endowments

walkern

Hello,
Has anyone got any advice on surrendering one of my two endowments to pay for a house extension instead of getting a bank loan:

I have paid off my mortgage and I have two endowments that are now just savings plans (and of course the life/critical illness cover, which I'm not that bothered about as my optimism on my life continuing after the period - I'll be 49 - is quite high ). Both are unit trust based (both currently 50/50 managed and with-profits) so from checking there is no chance I can sell these, just surrender them or keep them going. Both are 25 year plans.

1. Standard Life: The fund is worth £16000, I've put in £15000 (£80 a month) and the surrender value is £16900. The forecast at termination is 30k/35k/40k (4/6/8%) after putting in 24k. It has a shortfall amount so I could get between 4-8k from SL if I'm lucky. This will be 2019.

2. Prudential: The fund is worth £7500, I've put in £8400 (£60 a month) and the surrender value is 7900. The forecast at termination is 22k/28/35 after putting in 19k. This will be 2023. There is no shortfall.

My quandry is that the Standard Life is the best one to cash-in as I'll get back more than I've put in but it'll also theoretically give more back at the end, and while the Prudential (it was ScotAm) is just dire, but if I keep it I might just be pouring good money into what looks like is a pretty dismal performance.

Thanks.

dunstonh

The Std Life one will have a mortgage promise value which you need to factor in. You dont mention it at all.

The Pru one is likely to be the better performer and they have a much better track record. There is no mortgage promise values with them.

walkern

If you mean mortgage promise as in a top up then that is what I meant when I said is the 4-8k shortfall.

Why do you think Pru will be better given the dreadful past 12 years?

I'm not bashing Pru, I'm just trying to make sure I keep and cash-in the best one.

dunstonh

If you mean mortgage promise as in a top up then that is what I meant when I said is the 4-8k shortfall.

Right, so you add the MEP on top of the projected maturity value (as long as it doesnt exceed the target amount).

Why do you think Pru will be better given the dreadful past 12 years?

Pru have over a 90% success rate on hitting target on their WP funds. Scot Am plans maturing at the moment in shortfall have tiny shortfalls (typically in the hundreds of pounds only) despite the events of the last few years.

I'm not bashing Pru, I'm just trying to make sure I keep and cash-in the best one.

Assuming they both had the same target growth rate and both in with profits, I would keep the Pru.

pararct

Out of interest can you comment on how Winterthur funds are performing at Maturity?

I am in a very similar situation in that I have a couple of Wintherthur and one Clerical Medical policy. The Winterthur's were originally to cover a mortgage that no longer exists and were kept on as savings vehicles with the added like insurance.

To be honest I have toyed with the idea of cashing them in before but we don't need the funds for anything in particular. The payments are around £140 a Month and given interest rates as they are it will probably not do any better anywhere else.

dunstonh

Out of interest can you comment on how Winterthur funds are performing at Maturity?

Havent seen a Winterthur WP fund for ages. My gut instinct is that it wouldnt be that good but that is just a guess.