Should I Keep Paying Into My Endowment

We started paying in to a mortgage endowment in June 1998 and after viewing my latest statement it mentions that we may not hit the targets set to pay off the debt when the mortgage finishes. The current mortgage is split between repayment and endowment and the tie in to the better rate runs out in July this year so we're going to look at remortgaging then.

Question is what can I do with my endowment, should I stop paying in to it and let it sit until the policy matures then convert to a 100% repayment type mortgage in July, carry on with the split style mortgage or can I carry on paying in to the endowment and use the policy as an insurance for the kids when it matures ?

Hope this makes sense :confused:
They say that football is a religion, if this is true I worship at the Exacta Stadium, Chester

Replies

  • N9eavN9eav Forumite
    4.7K Posts
    I have the same problem. But I wonder if the markets in the future will rise a bit? What I did was when I renewed my Mortgage I raised the amount of the repayment part so that my endowment total was now smaller. I figure that was easier than losing the endowmwnt which if cashed was worth nothing,
    I am no expert but in 20 -30 yrs time the shortfall may only be a pitance and could be paid off with a Christmas bonus? Just guessing
    NO to pasty tax We won!!!! Just shows that people power works! Don't be apathetic to your cause!
  • I currently have an endowment (April 98), and am looking at remortgaging. I Have been told that I can switch to a repayment for the mortgage and still pay the endowmwnt, because it is worth so little to cash in now, it might pay off in the future.
    Smile it confuses people!
  • dunstonhdunstonh Forumite
    112K Posts
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    Forumite
    It really depends on the type of endowment, the target growth rate, the insurer and funds invested in and charges over the term.

    A unit linked endowment started in 1998 would almost certainly show a shortfall because of the stockmarket decline. However, that is not a bad thing as you are now buying those units cheaper and in the long term, that is good.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Also if cashing in an endowment beware of tax on the proceeds. I understand that if it has been held for less than 10 years, or it isn't more than 75% through the term (i.e. 6 yrs on an 8 yr term) then the proceeds may be liable to tax.
  • Thanks for the responses everyone. :)

    Looks like I'll be sticking with it for a while and just monitor the progress (or otherwise), then after the next low rate mortgage have another review of where I stand.
    They say that football is a religion, if this is true I worship at the Exacta Stadium, Chester
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