Phoenix Endowment - Opinions please ?

wannabemoneysaver

I have an endowment mortgage with phoenix:mad:

I posted this a few years ago and a lot of people advised cashing in ,but my IFA at the time said it would be better to leave it and "wait and see" for a few years, so I did.

I'm annoyed and angry with the whole thing, but would like to gauge some opinions on what the best thing to do would be now.

Details are :
20 year policy started in Dec 1995. Target figure was £42000. Basic Sum guaranteed was £17808. Bonus rates for the last 5 or so years have been 0.25% pa.

After contacting Phoenix, they have told me that The total bonuses now accrued are £4033.79. Maturity is Dec 2015.
"Current Surrender value of the policy is £18081 and is not guaranteed".

Terminal bonus rates for the last 9 years have been (Phoenix figures)
May - Aug 07 - 22%
Sep - Dec 07 - 21%
Jan - Jun 08 - 24%
Jul - Dec 08 - 16%
Jan - Jun 09 - 13%
Jul - Sep 09 - 5%
Oct - Dec 09 - 9%
Jan - Jun 10 - 15%
Jul - Present - 24%

I pay £100 per month.

By my very approx workings.

1) Surrender option = £18101 + £6600 saved payments. Invested till Dec 2015 would get me around £2500 interest = c. £27K ?

2) Leave in - worst case = £17808 + £4033 accrued bonus + 0.25% pa for 5 yrs = c £200 + low terminal (5%) = c. 22K ?

3) Leave in - best case = £17808 + £4033 + c£200 + 20% bonus = c. £25K?

If it's relevant, I am on a Woolwich lifetime tracker of Base rate + 0.27%, so curretly 0.77%. (Some good news). Life Policy irrelevant as both partner and I are in Final Salary schemes paying decent Death in Service benefit and in our 40s.

Can really see no point at all in leaving this in. (I know these figures are broad brush)

Would be interested to hear
1) Have I missed anything out of the equation?
2) What would FP mean by Surrender value is not guaranteed? Can they rob me twice over?

All advice and opinions gratefully recieved.

wannabemoneysaver

Would anyone like to voice an opinion?

Thrugelmir

Another option make the policy paid, i.e. pay no further premiums.

Then use the saved monthly premiums to overpay your mortgage.

The surrender vakue is dependent on market conditions at the time. Say the stock market crashed 50% on Monday. Then the entire value of the life fund would be slashed. So to be equitable to all policyholders the value of their share would be reduced proportionately.

With only 5 years to go on the policy, waiting and picking up the terminal bonus makes sense. Even though the annual return is low.

wannabemoneysaver

Thanks for that Thrugelmir.

What would I be likely to get from them if I made it paid up?

Thrugelmir

wannabemoneysaver wrote: »

Thanks for that Thrugelmir.

What would I be likely to get from them if I made it paid up?

You'll need to ask Phoenix for a value.

Then you can compare to surrender value you've been given. The terminal bonus might well be worth waiting for. Not suggesting a great return but better than paying off the mortgage currently. Whilst rates are so low.

minttrebor

I have a pension policy with pheonix which matures in January, I have two questions could anyone confirm if pheonix are paying final bonuses? and also I don't whish to have pheonix looking after my penion, I would like to move the fund and as the pension legislation is changing could I put it into a savings plan for a few years until annuity rates increase or possible work out sum sort of pension plan myself by buying government securitities? any ideas.
As a last thought to anyone who is looking to invest their savings into a pension forget it, put your money into a high interest account.

dunstonh

have a pension policy with pheonix which matures in January, I have two questions could anyone confirm if pheonix are paying final bonuses?

Obviously, pensions are very different to endowments. So, you cant compare the funds on life policies in the same way you can with pension policies. Also, Phoenix are a collection of dead and closed life companies. The performance of the underlying with profits fund has more to do with the legacy life company it was with.

and also I don't whish to have pheonix looking after my penion, I would like to move the fund and as the pension legislation is changing could I put it into a savings plan for a few years until annuity rates increase or possible work out sum sort of pension plan myself by buying government securitities?

No you cant. Legislation is changing for the better on pensions but what you propose is not directly possible and there would be little point. Mortality drag would likely be too high and as cross subsidy reduces, you would probably lose out. Many of the old Phoenix plans also have guarnatees on them. So, you also need to check that out first.

As a last thought to anyone who is looking to invest their savings into a pension forget it, put your money into a high interest account.

That is just stupid and wrong. It shows you dont have a clue what you are talking about and posting it on a public forum where someone may be foolish to believe you is irresponsible.