Surrender Endowment Policy and Save value received?

tonyflan

I've received another surrender valuation from Pheonix/Resolution (prev RSA) today for my failing endowment mortgage. I have 8 years left to run and it needed to make 64k (current value £30k), I have been given a surrender value of £23k.
I am thinking about taking the money now and putting it into a high interest account, along with the £94 monthly payments I would have paid into the endow, and maybe another £100 per month. Does anyone know the best types of account use to save this money?

Thanks.

EdInvestor

You would get a higher return by using the surrender proceeds and premiums to overpay the mortgage.Surrendering these Phoenix policies is the best way forward, there is no hope they will improve.

JohnG

Hi Tonyflan,

I totally sympathise with you on this, we had the same situation and realised it was better to surrender and reinvest the money where a better return could be had.

What we did in the end was firstly set up an Offset (C&G) and put as much of our savings in plus pay in £100 per month. We then surrendered the endowments and added them to the offset thus effectively reducing the deficit to around 12,000 (from 46,000).

I've just done a check today and feel confident of paying the mortgage off easily within two years because not only does the offset savings increase by the £100 per month but we also reduce the mortgage by about £168 per month too because of the interest that gets repaid (tax free).

I tell you it's a real boost when you finally get control of your mortgage - leaving it with "Phoenix" was a frightening prospect as all they seemed interested in was paying peter (pension funds) with paul (With Profit customers) and there is nothing anyone can do about it!

In Phoenix's favour, they were very efficient when it came to surrendering the endowments so that was a massive relief.

Good Luck! :beer:
Rgds
John

EdInvestor

Pleased to hear you're getting things sorted now, JohnG. :beer:

To my mind the "control factor" shouldn't be underestimated: much of the stress and frustration comes from the feeling that you are being systematically ripped off and there's nowt you can do about it.:mad:

In fact it can be fixed, it just needs a bit of determination to tackle the problem, plus some guidance on how to go about it.