Maturing Endowment

Countalot

The first part of our endowment "matures" at the end of September with Standard Life. We think this will be around £17k although they have not provided any information since the last statement in Feb. They say we have a maturity investment option with the policy and can re-invest the funds for £5 a year in a tax efficient investment bond. We do not need the cash, have paid off the mortgage but would like to invest to exceed inflation if possible. We have around £250k now in various pots - savings plans (which are all coming to their term), cash ISA's maxed and regular savers etc and have considered whether it would be advisable to go to an IFA and try and bring it all together, particularly as the second bit of the endowment is due in May around 25k and a small inheritance of around 25-30k in the next year when a property is sold. We are both basic rate taxpayers, over 50 with defined index linked pension schemes and two kids to put through college. Is this MIO with Standard Life worth considering or should we just take the cash and stick in an instant access account until April and then top up the ISA's? Any comments, thoughts welcome.

opinions4u

See an IFA.

You have multiple savings and investment plans and multiple objectives to plan for. Making a decision on your Standard Life maturity proceeds, in isolation to your broader needs, could be a mistake.

An IFA is absolutely the right place to turn.

dunstonh

ave considered whether it would be advisable to go to an IFA and try and bring it all together

Your choice is either to DIY or use an IFA. All the other options (tied agents, sales reps etc) can be ignored.

Is this MIO with Standard Life worth considering

No.

should we just take the cash and stick in an instant access account until April and then top up the ISA's?

Impossible to say without knowing your circumstances and objectives.

Countalot

Historically, objectives were to save to supplement pension, we saw IFA and took his advice and we have not "missed" the money set aside and if we hadn't we probably would have found other things to spend it on! He is no longer in business though..
Now objective is to try and raise an annual income from this of around about £12k (not sure if this is practical) to replace income protection policy which finishes next June. Hopefully we will not need to draw on this for a few years yet as existing income (pension & salary) should be enough to meet committments and I can work more if needed. This will pay for the extras and one offs - university education for kids, new kitchen car etc over the next 15-20 years. we want to start taking time to enjoy stuff though and are reasonably risk averse in the current climate. We are now unlikely to be able to add significantly more to this pot other than my lump sum (if not abolished) in 9 years circa £35k. We have no plans to hand this money down to the kids, they will hopefully be left with the house.

dunstonh

Now objective is to try and raise an annual income from this of around about £12k (not sure if this is practical) to replace income protection policy which finishes next June.

So, using savings accounts for all of this would be a pretty poor option then. (subject to shortfall risk and inflation risk).

That means looking at investment options. So, that leads on to the question of whether you are capable of making the investment decisions, tax wrapper decisions and long term planning decisions or not. If you are, then DIY is an option. If you are not, then use an IFA.

are reasonably risk averse in the current climate.

There is no risk free option when you want an income. That includes savings accounts. £250k in savings will be worth around £162,500 in 10 years time and £105,625 in 20 years time. The income it produces will be lower in real terms to. So,whilst everything goes up in price, your income and capital will be going down in real terms.

To avoid that, it typically means using some investment options with a view to being able to keep or improve on a real terms value.