Endowment - Take the Money and run?

keicar

Hi there, I'm new to this and a bit 'green' as far as finances go. I am considering surrendering my Prudential Endowment (ex Standard Life)as through a redundancy payment I am in a postion to pay my mortgage off. Would this be a good idea?

Is is currently on 'amber alert' with a projected shortfall of £10,500 @ 4% return. It expires in 2020.

I have been told by Prudental that I could surrender say 50% of the 'Clusters' and half my payments - don't quite see the advantage?

Thanks in advance

EdInvestor

Post some figs about it for a view

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

Interest rate on your mortgage.

How do you mean it is "ex Standard Life?" Endowments are not like pensions, they can't be transferred from company to company.

keicar

Sorry got Standard Life on the brain, I meant Scottish Ammicable who were taken over by Prudential.:o

I think I've found the figs you wanted.......

Guaranteed sum I think you mean Target Amount = £45k
Unsure on what you mean by declared bonuses cant put my finger on any info.
The surrender value is £13k
Maturity projections are ....
4% Growth £36600(£10k Shortfall)
6% Growth ££1400 (£1400 Shortfall)
8% Growth £10000 Surplus

My current Mortgage interest rate is 5.85%

Sorry For being a bit 'thick'

Thanks!

dunstonh

Scot Am paid 95% of their endowments a surplus last year and are on track for 96% this year. That trend it likely to continue but it is subject to market performance.

If the monthly cost of the endowment and interest only mortgage is cheaper than the repayment mortgage that would replace it (which many endowments are as that was a common reason for doing them) then it would probably be better to stick with the endomwent. The bonus rate, inc terminal bonus is not far off that 8% figure currently.