What to do with my Endowment payout?

Robert_Tycelyn

My Aviva policy matures next month. My dilemma is what to do with the £20,00 payout.
Do I:
1. Use the money to completely pay off the £20,000 interest-only debt with my Mortgage provider. I am on a lifetime HSBC Tracker BOE + 0.38% (so currently 0.88% interest rate).

2. Invest the money elsewhere while the BOE interest rate is (up to now) low.

Views would be much appreciated.

Loughton_Monkey

At 0.88% it is an absolute 'no brainer' not to pay off your mortgage. You can get well over 3% (safe) in a mixture of instant and short-term fixes. After tax this is still a clear profit.

Jake'sGran

Robert, what kind of policy was it?

Robert_Tycelyn

Kake'sGran - my policy is an Aviva/NU With profits Endowment - seriously underperformed - but I was anticipating the £20000 they have quoted. (This figure also includes a £7500 'promise').

I also have another policy (estimated £52000) maturing next year - once again to cover an interest only HSBC lifetime tracker BOE +0.38%.

Actually, assuming that there will usually be a savings account higher (after tax) than the lifetime tracker deal that I'm on will it make sense to 'indefinitely' pace the £20000 (now) and the £52000 (next year) to take advantage of the possible extra interest???