Endowment returns.

magpiecottage

Suppose you were recommended to take out a 25 year savings endowment with a £25 per month premium.

If you cashed it in after about 15 years and got £3,500 back, would you be happy with the advice you had been given?

CloudCuckooLand

On the basis of the brief description;

Someone who understands how endowments operate would. (with some caveats, like the source/type of "advice")

Someone who did not would not.

Was advice sought in advance on whether it would be cost efficient to cash in, mid-term ?

What alternatives were investigated, and why was the endowment chosen over those ?

Why cash it in, if a 25 year product was wanted ?

If a 25 year product was not wanted, why accept the advice ?

At the time of cashing in, was a surrender value sought ?

Was advice sought immediately prior to cashing in ?

If the surrender figure/advice to cash-in was not liked, the option of not cashing in remained available...

dimbo61

£25X12X15= £4500 paid in over 15 years and offered £3500 for cashing in early !!!
Lose over £1000 and any interest

magpiecottage

dimbo61 wrote: »

£25X12X15= £4500 paid in over 15 years and offered £3500 for cashing in early !!!
Lose over £1000 and any interest

I know - but if you needed to surrender would you complain about it?

Thrugelmir

magpiecottage wrote: »

I know - but if you needed to surrender would you complain about it?

Probably not. If having the money now was the overiding factor.

Annisele

magpiecottage wrote: »

I know - but if you needed to surrender would you complain about it?

I don't know - it would depend on whether I had anything else that I could have cashed in instead. Maybe I had thousands invested in Woolworths or Arch Cru or something like that, and I'm sure that any competent adviser would have told me to cash in those assets rather than my endowment policy

DVardysShadow

dimbo61 wrote: »

£25X12X15= £4500 paid in over 15 years and offered £3500 for cashing in early !!!
Lose over £1000 and any interest

Gain life insurance cover. Still not brilliant.

Gorgeous_George

Sounds like a reasonable return to me. I am no fan of endowments but surrendering one so early would seem ludricous.

GG

opinions4u

15 years ago I would have expected a clear warning about surrender implications. Indeed "surrendering early is always a bad idea" was pretty much how I'd have expected it to be positioned - in hindsight not wholly accurate, but at the time not an unreasonable claim.

Customer should be miffed, but probably knew cashing in early was not a good idea.

magpiecottage

opinions4u wrote: »

15 years ago I would have expected a clear warning about surrender implications.

So if you didn't think you had been given a warning at outset. Would you complain then?

silvercar

magpiecottage wrote: »

So if you didn't think you had been given a warning at outset. Would you complain then?

I'd expect a response along the lines of "what part of 'this is a 25 year policy' did you not understand?"