standard life- for all of your life????

moneyka

I have heard rumours that Standard Life are to merge in the near future. Can anyone clarify this?
I save around £30 per month with them in Versatile Investmant Plan and have so far accrued £2000. Considering at the moment I am forecast to recieve between 10k & 17k if I allow it to mature in 20 years, I am thinking of cashing it in to pay off some credit card debts and investing more wisely elsewhere.
But if they merge, I will lose out on a payout.
Does anyone have any advice please?

Cheers

Moneyka

dunstonh

I have heard rumours that Standard Life are to merge in the near future. Can anyone clarify this?

They are not planning any mergers. They do plan to demutualise around 2006/2007. However, that is subject to member vote and currently a vote would fail and demutulisation wouldnt take place. The directors plan to spend this year "educating" the members of the reality of the situation and hope they can change enough policyholders minds.

If there was a payment, it would be expected to average around £1100. How that would be paid is not known. If may be added to policyholders plans or it may be in the form of shares.

As for what is best for you, then it is not possible to state that on here. You have to work out what you would lose by surrendering the plan against what you would save on debit interest on your liabilities.

moneyka

Thanks a lot - sound advice xxx

sandymac_3

Hi, I'm in a similar position - have SL endowment policy costing £43 a month (£35,000 life cover); bought originally as collateral security for mortgage. No longer have the mortgage but have kept the SL policy as investment on advice of IFA some time ago. NOw looks as if it is under-performing even more than I thought (red letter just received). 3 questions-
1. should I wait till SL demutualise to get a windfall then sell it?
2. should I keep it on the basis that it may still bring home the goods - matures 2016??
3. Also, as now do not have a mortgage to pay off, can I still go back to original broker to seek compensation for mis-selling? The mortgage is paid off no thanks to his advice and the lump sum predicted is clearly not going to materialise!


Any comments gratefully received!

Cheers.

dunstonh

1. should I wait till SL demutualise to get a windfall then sell it?

Depends on the value of the policy or how good/bad the endowment is.

2. should I keep it on the basis that it may still bring home the goods - matures 2016??

No-one can answer that as we know nothing about the policy. I recently reviewed a forum members 2 Standard Life policies on their request. One of them was below par but the other was superb. Had i just answered on the forums without knowing the info, anything said would have been wrong.

3. Also, as now do not have a mortgage to pay off, can I still go back to original broker to seek compensation for mis-selling? The mortgage is paid off no thanks to his advice and the lump sum predicted is clearly not going to materialise!

Unlikely you would get anywhere as you have no mortgage.

NOw looks as if it is under-performing even more than I thought

The projection alone is insufficient to decide whether it is underperforming over the term. What else have you read about YOUR policy that makes you think that?

EdInvestor

Hi sandymac

sandymac wrote:

1. should I wait till SL demutualise to get a windfall then sell it?
2. should I keep it on the basis that it may still bring home the goods - matures 2016??

The bottom line on the DM really is how much terminal bonus is still left in your policy. If there's a lot,30-40% or more, then it may be wise to forget about the windfall and surrender the policy as this TB is likely to disappear and the windfall will only replace it (hopefully).

If you have very little TB left it's likely to be sensible to stay for the windfall, particularly if the policy is fairly small.

If you don't know the TB %, call them up and ask, and while you're at it get a current surrender value. If you tell me these figs, plus the total of the guaranteed sum assured and attaching declared bonuses, we can look at whether it's worth keeping the policy as an investment long term.

EdInvestor

dunstonh wrote:

They are not planning any mergers. They do plan to demutualise around 2006/2007. However, that is subject to member vote and currently a vote would fail and demutulisation wouldnt take place.
If there was a payment, it would be expected to average around £1100. How that would be paid is not known. If may be added to policyholders plans or it may be in the form of shares.

Standard Life plans to demutualise next year by floating on the stockmarket.The plan is to put it to a members vote at next year's AGM a year from now. It's not at all clear what members think about DM, but my own suspicion is that they will vote Yes because it represents the only way of making up their losses.It's very obvious that if Standard is forced to remain mutual then the losses will get worse.:(

The flotation should take place in June or September 2006, depending on how the stockmarkets are behaving at the time. Members will get shares. Some members ( eg people living overseas) might get cash.

How much will the shares be worth?It's not clear at present but a flat rate as compensation for loss of membership of 500 pounds is likely for all, with a variable rate on top of that. The variable rate is based on the size of your policy and how long you have been a member. 15-20% of policy value might be a reasonable sum to think about, but it really does depend on whether the management can restructure the company well and the performance of the stockmarket over the next year.

Things have already improved quite a lot since the DM plan was announced a year ago, so fingers crossed.But it won't really be clear until much closer to the time.