Standard Life Low Cost Endowment

okydoky

Just wondered if anyone has any info on this?
Took out one of these 24 years ago - it has one year to run.
Basic Sum Assured is £6500 - current srrender value is £11500 plus final bonus of about £1100.
I wll let it run its course, so has anyone had one of these mature recently - I have no idea whether I can expect any terminal bonus on top, or if thats what the "final bonus" is - seems small at only £1100!
Mortgage amount is £20K so considerable shortfall expected.
Thanks

kingstreet

Final bonus and terminal bonus are one and the same. The investment returns in the next year can affect the terminal bonus, upwards or downwards.

Do you know if your plan has a Mortgage Endowment Promise?

http://www.standardlife.co.uk/1/site/uk/help/existing-customers/mep

okydoky

Thanks - there was a "promise", but it was subject to certain returns being acheived which were not hit, so to my mind the promise was not worth the paper it was written on??:mad:

kingstreet

okydoky wrote: »

Thanks - there was a "promise", but it was subject to certain returns being acheived which were not hit, so to my mind the promise was not worth the paper it was written on??:mad:

Are you talking about what you deemed (from the inverted commas) a promise when you bought the plan, or have you actually followed my link to the Standard Life MEP site?

In September 2000, The Standard Life Assurance Company issued the Mortgage Endowment Promise ("the MEP") to the majority of our UK and Irish mortgage endowment planholders.

The MEP provided that, subject to the fulfilment of a number of conditions, including in relation to the growth in Standard Life's capital, an eligible plan would meet its targeted value at maturity as long as the "6% a year test" was met. Under the MEP, the 6% a year test would be met if the earnings on the assets backing the plan were on average at least 6% a year (after tax) from 28 September 2000 to the maturity of the plan.

and

Projections carried out shortly after the MEP was introduced showed that certain eligible planholders ("MEP Top Up Planholders") would have a shortfall when their plans matured, even if the future earnings on the assets in which their plans were invested were on average 6% each year (after tax). Therefore, the MEP also provided that, subject to fulfilment of the conditions of the MEP, a top up payment would be paid to each of these planholders on maturity to reduce the impact of any shortfall. The maximum amount of this potential top up ("the Maximum Top-Up Amount") was equal to the shortfall estimated at the time those projections were made, assuming that the earnings from that time until maturity on the assets in which their plans were invested were on average 6% each year (after tax). This was communicated to each MEP Top-Up Planholder shortly after the MEP was introduced.

The bold section is my emphasis to cover your "promise" comment if it did apply to the MEP and not just to the plan sale.

dunstonh

Thanks - there was a "promise", but it was subject to certain returns being acheived which were not hit, so to my mind the promise was not worth the paper it was written on??

All the SL plans I see with MEP values are maturing with the MEP being added. Also, the summary plan statement (that IFAs are sent) show the MEP range (low to high) for each plan yet to mature.

They had to word the promise in certain language for legal reasons but some people have incorrectly assumed that means they won't get an amount unless 6% was achieved.

okydoky

Thanks but I am now quite confused!

I have read the MEP and did receive letters to this effect some years ago, however I really assumed they were worthless as subsequent returns were below 6% - are you saying that I am likely to get my full £20k when it matures next year??

That woulindeed be good news:beer:

dunstonh

are you saying that I am likely to get my full £20k when it matures next year??

Highly unlikely.

You will likely get the maturity plus some MEP value added. However, it wont be enough to hit the target.

You needed 6% to hit target. That hasnt happened but its not a case of 6% hit or nothing. You get a proportion on top.

Ron2

I have a Standard Life low cost endowment which matures on Friday.

As of yet I have no idea what the payout will be. I will not know until I receive the cheque on Monday or Tuesday. I have a rough idea but that is all.

I phoned them up to get an idea as to how much I will get.

Their answer, we won't know until Friday.

So with 4 days to go until my mortgage is supposedly finished I don't know if it will be.

Who pays the interest on my mortgage from Friday to Monday or Tuesday? Me of course. Luckily my mortgage is only £23 a month.

I am so looking forward to be mortgage free, pity I won't know until Monday or Tuesday if I will be, from the proceeds of the endowment.

Just to add, I do have the funds to pay of any shortfall, it is just annoying that I don't know how much I will need.

silvercar

I've got a standard life endowment maturing next year also looking like it will only payout about 60% of intended amount.

Interesting your experience on payout. I have a L&G endowment paying out next month and just received a letter asking for details of the bank account I would like the proceeds paid to. They will pay into the account to ensure cleared funds on the day the endowment matures.

They have given me a predicted amount, but said it could change between now and the payout date.

okydoky

Just an update on this - payout including terminal bonus is just over £13,300. Thats about £10K short of original illustration and £6,700 short of amount needed to clear the mortgage amount. Happy Days - NOT!:mad:

dunstonh

okydoky wrote: »

Just an update on this - payout including terminal bonus is just over £13,300. Thats about £10K short of original illustration and £6,700 short of amount needed to clear the mortgage amount. Happy Days - NOT!:mad:

What is your MEP value to add to that amount?