Should I cash in my endowment?

Vickicb

I'm moving fairly soon (fingers crossed) and if it all goes smoothly I will pay of a chunk of debt (downsizing, but still to a lovely house with plenty of room) and will be left with the following:

Mortage: £160,000 (we're putting in £18K equity) fixed for 2 years
Unsecured Loan: was £20,000, now around £15,500; £304 per month
Student Loan: £160 per month, will be paid off in around 2 years
Plus lump sum of around £5K after moving expenses to do stuff to the new house.

We have an endowment with a target of £39K with 12 years left to run (originally 25 years) plus another with a target of £12K. Have sent misselling letter this week on the larger one, towards which I currently pay £80 per month.

Our new mortgage is £95K repayment and £65K interest only (mortgage on current house is £187K interest only!!!! so an improvement...) at a total of around £800 per month.

My question is this: should I cash in my larger endowment and if I do will I get enough to pay off the unsecured loan? I could then repay the unsecured loan and increase the repayment part of our mortgage by using the additional £304 + £80 per month. The smaller endowment could be used towards Uni fees for my kids if I keep it and don't need to use it towards the mortgage.

I'm not intending to pay off student loan any quicker as it is very low interest, but thought I could also use this monthly figure towards the mortgage when paid off as it should finish the same month as our 2-year tie-in period of our new mortgage (or just before, depends when we end up moving!)

I know alot of people advise against cashing in endowments, but would it make sense in my case?

JollyNolly

I think the experts around here (I'm not one) will probably tell you that you need to get some more detail - like how much interest you're paying for your unsecured loan, for example, plus all the info about your endowments:

Provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date


In my case, I intended to cash in my endowment until I discovered that it was actually doing quite nicely (currently about 7%) so I'm leaving it where it is for the time being. You can find out how much your endowments are worth by ringing them up and asking for the surrender value. If you do this over a period of time you can get an idea as to whether it's worth hanging on to them or not.