Who's good at math's ?, 2 endowments , 1 mortgage

Xbigman

Now I've seen the shortfalls my advice is to forget cashing in for now. Get a complaint off regarding misselling and get that sorted out first of all.

You're also fixed until 2009. I would view that as the deadline to make a decision, so plenty of time yet. But get that misselling complaint off now.

Are these endowments tied to the mortgage you have? If they are your mortgage company will not give permission for you to cash them in just like that and you may find they insist on the money being used to pay off the IO mortgage, not the repayment (this is what they would be tied too).

Sorry we are throwing up more questions than answers.

Lastly. I wouldn't personally go to an IFA with this but it could be worth it. But keep in mind an IFA on commision won't make any money telling you to leave those endowments alone. Whatever advice you get, check back here or on the 'savings and investments' board.
Regards



X

EdInvestor

newtomoneysaving wrote:

projected amounts
4% £18,600 (£14,900 shortfall)
6% £21,500 (£12,000 shortfall)
8% £24,900 (£8,600 shortfall)

If you surrendered this one and placed in on deposit@4% also paying in the premiums to maturity (excluding the annual rises) you would get 20,900.
Obviously more if you upped the premium annually.

If you used it to reduce a mortgage with an interest rate of 5% you would get 22,553 (again excluding the 5% annual premium uplift.

So I suggest you dump this one and use it to overpay the mortgage, increase the monthly mortgage payment by the premium as this will give you a guaranteed annual return of more than 6% at no risk.

projected amounts
4% £9030 (£4020 shortfall)
6% £10500 (£2550 shortfall)
8% £12300 (£750 shortfall)

If you surrendered this combined WP/Unit linked policy and placed it on deposit @4% as above you would get 9,601 at maturity.Using it to overpay a mortgage @5% would generate 10,398.

The Pru Scot Amic WP fund is one of the few that didn't suffer badly in the market crash and still has a big chunk in equities, so one can expect it to return at least 6% and possibly more, while the unit- linked bit could go higher, 7-8% .

So there isn't a clear-cut case to distch this one, it will probably wash its face, though not with much of a premium.On the other hand a bit of life cover is included..

rossbenn

Xbigman wrote:

Now I've seen the shortfalls my advice is to forget cashing in for now. Get a complaint off regarding misselling and get that sorted out first of all.

You're also fixed until 2009. I would view that as the deadline to make a decision, so plenty of time yet. But get that misselling complaint off now.

Are these endowments tied to the mortgage you have? If they are your mortgage company will not give permission for you to cash them in just like that and you may find they insist on the money being used to pay off the IO mortgage, not the repayment (this is what they would be tied too).

Sorry we are throwing up more questions than answers.

Lastly. I wouldn't personally go to an IFA with this but it could be worth it. But keep in mind an IFA on commision won't make any money telling you to leave those endowments alone. Whatever advice you get, check back here or on the 'savings and investments' board.
Regards



Why do you assume that miselling has taken place?