Scottish Equitable Endowment Maturing

redmalc

Hello ,I have been reading horific stories about Endowments over the last few years,my policy matures in Feb 2012 can anyone advise if Scottish Eqitable have performed better or worse than the rest.Also do endowment have bonuses at the end of the 25 years which are added to the value of the policy,I am not relying on the investment to pay my mortgae because we changed to a re payment years ago and have now completed the mortgage so it is a nest egg for us

yelf

is it a unit linked endowment or a with profits endowment?

redmalc

With Profits

dunstonh

Also do endowment have bonuses at the end of the 25 years which are added to the value of the policy

Not really. Terminal bonuses are added at the end on conventional with profits plans but they accrue as you go along (and go down and up with the underlying investments). Many providers give you the information on the terminal bonus every year. Some do not. It also depends on the type of plan and version it is.

Its always risky making a judgement about a plan you dont know anything about. i.e. not knowing target growth rates, which version it is etc. However, you only have less than 18 months left so the projections should be pretty much close to the likely figure unless its a plan that doesnt include terminal bonus accrued to date in the projections.

TREVORCOLMAN

dunstonh wrote: »

Not really. Terminal bonuses are added at the end on conventional with profits plans but they accrue as you go along (and go down and up with the underlying investments). Many providers give you the information on the terminal bonus every year. Some do not. It also depends on the type of plan and version it is.

Its always risky making a judgement about a plan you dont know anything about. i.e. not knowing target growth rates, which version it is etc. However, you only have less than 18 months left so the projections should be pretty much close to the likely figure unless its a plan that doesnt include terminal bonus accrued to date in the projections.

So those who are in the same boat - Standard life low cost endowments - one maturing Nov 11 and one Apr 12 should carry on or cash them in? (dont need them to pay off anything).

dunstonh

TREVORCOLMAN wrote: »

So those who are in the same boat - Standard life low cost endowments - one maturing Nov 11 and one Apr 12 should carry on or cash them in? (dont need them to pay off anything).

Standard Life have a mortgage endowment promise (MEP). That is often the decider on whether its worth keeping it or not. If the MEP is in the thousands of pounds then it can be worth keeping (I've seen them in the tends of thousands but also in the low hundreds). You only get the MEP on maturity.

Whilst you wouldnt want to be in that fund with that endowment now if you were buying, you have paid the bulk of the costs and Std are certainly not the worst. They are more than capable of hitting the mid projection and indeed, can at times exceed the high one.

The older Std Life conventional plans didnt used to include the terminal bonus accrued to date in the projections. So, you ended up with this anomaly where the current value was higher than the projected values. Std fudged that a bit a few years ago by increasing the projections to be at least a minimum of the current position but it still potentially understates the likely returns.

Std also had plans where you could set the target growth rate. A low target growth rate is more likely to hit target than a high one.

So, you cant apply a 100% rule to Std Life plans but you should always look out for the MEP as that could change a "get rid off" calculation into a "keep" one.

TREVORCOLMAN

dunstonh wrote: »

Standard Life have a mortgage endowment promise (MEP). That is often the decider on whether its worth keeping it or not. If the MEP is in the thousands of pounds then it can be worth keeping (I've seen them in the tends of thousands but also in the low hundreds). You only get the MEP on maturity.

Whilst you wouldnt want to be in that fund with that endowment now if you were buying, you have paid the bulk of the costs and Std are certainly not the worst. They are more than capable of hitting the mid projection and indeed, can at times exceed the high one.

The older Std Life conventional plans didnt used to include the terminal bonus accrued to date in the projections. So, you ended up with this anomaly where the current value was higher than the projected values. Std fudged that a bit a few years ago by increasing the projections to be at least a minimum of the current position but it still potentially understates the likely returns.

Std also had plans where you could set the target growth rate. A low target growth rate is more likely to hit target than a high one.

So, you cant apply a 100% rule to Std Life plans but you should always look out for the MEP as that could change a "get rid off" calculation into a "keep" one.

One fund was due to pay £30k and is due to pay less than £20k. The other was due to pay £6k and will pay around £4k.

As for the MEP - when is a promise not a promise - when its with Std Life!

The notes say:

About your MEP:

St Life introduced the MEP in 2000. When your plan matures we will check whether is passes what we call the 6% a year test. Your plan will only pass this test if the assets backing your plan earn on average at least 6% a year (after tax) from 28 Sep 2000 to the date your plan matures. If your plan passes the 6% a year test AND the maturity value is less than the plans target amount, you MIGHT recieve a MEP Payment.

On the 30k policy it states:

HOWEVER, WE THINK IT UNLIKELY THAT YOUR WILL RECEIVE ANY MEP PAYMENT.

.......Therefore when making any financial plans about your financial affairs do not assume you wil receive and MEP payment!

Whether a payment is to be made under MEP cannot be determined until the plan has matured!
:mad:

On the 6k policy it states: You MAY recieve a MEP of between £4 and £6 or you may get NIL!

dunstonh

on the 6k policy it states: You MAY recieve a MEP of between £4 and £6 or you may get NIL!

That is the correct way for them to word it. There is no other way they can word it. If it hits target then you will get nothing as its designed to only pay out when there is a shortfall.

TREVORCOLMAN

£4k +£6 is not £6k?