paid off mortgage, should i keep endowment?

bennyb_3

I have an endowment plan with Abbey National. Thanks to an inheritance, I was lucky enough to completely pay off my mortgage but would like to know whether it's worth keeping up the endowment payments or cash the plan in to pay debts or start a pension.

I currently pay £64 per month. I've actually paid £7111 to date (since May 1997) and the value of the plan is currently £6024.

It also has £41,5000 life and critical illness and there is no get out penalty.

All advice gratefully received!!

dunstonh

What investment funds is it in?
What alternative investment funds are available?
What is your attitude to investment risk?
What is the target growth rate?
What options are built into the plan?
What are the ongoing charges?
Are you on are likely to be on any means tested benefits?
What is your tax status?
Do you need the life cover and CI?
What is the replacement cost of these if you do need them (noting that 1997 CI coverage is better than what is covered in 2006 plans)?

These are just some of things that need to be answered when looking if its best to keep or maintain the endowment

bennyb_3

wow, thanks! Quite a lot to consider. I'll get researching.

bennyb_3

right - I have some answers to your questions. Pls let me know if you have any further thoughts. Most helpful...

-The endowment plan is invested 50:50 in with profits and managed funds.
-Alternative investment funds are UK Equity, Deposit, International
-My attitude to investment risk is pretty unadventurous - not keen to lose money!
-The target growth rate is 7.5%
-Options built into the plan–waiver of premium.
-Ongoing charges - the managed fund has a fee that is (I think) 1% of the premium.
-I'm unlikely to be on means tested benefits.
-I'm relatively recently self-employed and don't earn a great deal yet so pay little tax though this is likely to increase.
-Not sure I need life cover as don't have major debts or dependents but CI may be good give my self-employed nature.