NU with profits endownment

Chezis21

Hi, I have a NU with profits endownment due to mature on 1/3/2008.

The plan is on schedule to pay out £24,300. I was considering cashing it in as I am moving house and taking a capital + interest mortgage only ( This is my third move since taking out the endownment in 1983)

NU gave me a surrender value of £23548.

Before the plan matures NU say they will send me an esitmated maturity value calculated by adding:

1. The with profits benifit
2. + the total regular bonus
3. + any final bonus that may be added.

Should I cash it in or wait ( it just means that the new kitchen I want to install in my next house will go on hold! )

Any advice would be appreciated.

Thanks
Chez

dunstonh

A 1983 endowment gets LAPR tax relief. You are also gettig life cover and most NU endowments are expected to hit target and pay a surplus, just as yours is indicating.

I think you should wait for the letter from NU as its always best to act on facts. You also have the distribution of orphan assets happening in 2008 and that is based on you being a policyholder at a date just before that. If you surrender it, you may be missing out on an average payout of around £1000.

Chezis21

Thanks. I have not consulted with a financial adviser and tend not to as I use the internet extensively for info. Mind you however well informed I am - I know that I dont know it all!

I will probably keep the endownment and let it mature...kitchen, holdiday to Austraila etc can wait for a a few months longer.

Chez

EdInvestor

Chezis21 wrote:

Hi, I have a NU with profits endownment due to mature on 1/3/2008.The plan is on schedule to pay out £24,300.

If you took the surrender value and put it on depost @4% now, you could expect to get 25,470, without even paying in the monthly premiums.

So there doesn't seem to be a lot of point in waiting if you don't expect a decent terminal bonus on top or a windfall.(Have they given you an estimated maturity value?If not, ask for one to see if any TB is likely.)

The orphan asset windfall applies to people whose policies were originally with Commercial Union of General Accident, not with NU.It is not yet clear when the money will be paid out, announcement is due quite soon, may be worth waiting for more news if applicable.