Endowment with Standard Life.

Jeanette1965

I was wondering if anyone has recently had an Endowment Policy come to an end with Standard Life.

I have one due to end in 2 1/2 years time. My ex-partner wants to cash it in after we've been paying it for 22 1/2 years. However I've been told that if you finish the full term that you get 'a promise'.

I just wondered if anyone had recently received this promise and whether we are talking about a couple of hundred or a couple of thousand pounds?

Our endowment was taken out on £26,500 - although we are going to get no where near this.

Thanks,
Jeanette.

Milarky

That 'promise' may refer to this

The report adds:

"The promise will [] apply to policies which mature before 31 December 2005.

"People with policies maturing after that date will still be in line to have some of their shortfall covered."


Regular poster dunstonh may be aware of what this currently means to SL policyholders but I can't, I'm afraid.


[Hang tight for more replies]

Some (not much) info in this thread 15 months old:
https://forums.moneysavingexpert.com/discussion/1563267

Legal Submission to continue the promise in a modified form (2007):
http://www.scotcourts.gov.uk/opinions/2007CSOH137.html

The Original 'promise' document October 2000 [pdf]:
http://ifasok.co.uk/Downloads/BWhmp28203%20%281%29.pdf

Some cheery news for 2008 maturing policies:
http://www.insurancedaily.co.uk/2008/01/30/standard-life-improves-mortgage-endowment-payouts/

"The maturity value of a 25-year mortgage endowment taken out by a male aged 29 and saving £50 a month is £37,763 compared with £36,950 on a similar policy that matured a year ago."

But, two years later, things are looking dodgy again:
http://www.guardian.co.uk/money/2010/jan/26/standard-life-cuts-endowment-payouts

"A typical maturing 25-year, £50-a-month Standard Life mortgage endowment would now pay out £26,869 – down 13.5% on the £31,066 an equivalent policy was delivering a year ago."

£50 per month, 25 year Endowment Maturity values (assuming press details above are correct):
2007: £36,950
2008: £37,763*
2009: £31,066
2010: £26,869

*Stockmarket 'peaked' in October 2007, 'troughed' in March 2009

here is the 'annualised return' for each year

2007: £36,950 25 yrs (6.57%) Final yr (N/K)
2008: £37,763 25 yrs (6.72%) Final yr (+7.89%)
2009: £31,066 25 yrs (5.38%) Final yr (-13.38%)
2010: £26,869 25 yrs (4.36%) Final yr (-10.16%)

dunstonh

The Mortgage promise value (MEP) is added to the maturity value. it is not included in the projections. I have seen MEPs with values in the tens of thousands and some in the hundreds. Thousands of pounds are most common. Standard Life or your IFA will be able to give you the value range of the MEP.

If you surrender before maturity you dont get it.

syco1

I had a Standard life 20 year endowment mature last October.
Broke my heart. Don't recall any promise or bonus. Amounted to 67 per cent of what I was told was the minimum it could pay out. I was also told that I would be able to retire on the proceeds even after I had paid the mortgage off.
The one consolation is that you presumably had Standard life shares out of the deal.
I am pretty sure you would lose out equally if you terminated early.

syco1

Just found the breakdown of my maturity value (?).

I received a Final Bonus of 1 percent of the Sum Assured and the Annual Bonuses - can't see anything about a promise.

There was roughly a 33% shortfall when it came to paying off my mortgage.

evenasus

I feel so sorry for people who have endowment mortgages maturing these days.
It's only 7 years ago that our Standard Life endowment matured. Not only did it pay off the mortgage, it also paid a bonus of over £8500.00.

webwiz

If you decide to cash it in (I don't advise that by the way) then do not surrender it until you have got quotes for selling it to a broker. They usually offer much more than the surrender value.

Milarky

webwiz wrote: »

If you decide to cash it in (I don't advise that by the way) then do not surrender it until you have got quotes for selling it to a broker. They usually offer much more than the surrender value.

Brokers don't 'buy' policies, of course, they only sell through your policy to a willing buyer. In practical terms there is often 'no market' in second hand endowments - like the tide coming in and out - as when, for instance, I sought 'quotes' for my SL policy about 2004 - and no buyers were 'found' to exist at the 'quoted' price the broker provided.

00ec25

Milarky wrote: »

Brokers don't 'buy' policies, of course, they only sell through your policy to a willing buyer. In practical terms there is often 'no market' in second hand endowments - like the tide coming in and out - as when, for instance, I sought 'quotes' for my SL policy about 2004 - and no buyers were 'found' to exist at the 'quoted' price the broker provided.

I was only wondering that myself this morning as another month's premium went out to SL. From the marketing blurp from the brokers, one is led to believe there is a ready market for such policies, but given the performance on mine, I would rather sell it than buy it at this time , so what's in it for the buyer? they pay a premium to get a policy which in SL case has what? a 1% terminal bonus - big deal! Not much return on their investment buying the policy

Jeanette1965

Thank you very much for your advice. There was some useful reading.

Phoned SL again this morning and spoke to a very nice lady - she told me my MEP without me even asking. Said it should be between £1560 and £2340.

So it looks like I won't be selling and ex will have to look elsewhere for money for new car!!!

Cheers!

dunstonh

Shame the MEP is at the lower end of the scale but at least you know it now and £1500-2300 is better than you realised before. Without the MEP, many of them would be worth dumping. If you have a good MEP it can make them worth keeping.