Advice needed Friends provident endowment

bigal993

Hi Guyz
I have an endownment with the above its supposed to cover £25,000 for my mortgage.
it was taken out on 4/8/1999 till 4/8/2018
it is showing massive shortfalls, as shown below

it it grows at
4% - £15,900
5.5% - £18,100
8% - £22,500
I was wondering if anyone can tell me, is it worthwhile continuing with this or cash it in and pay it off the mortgage, the cash in value on the 30/6/2006 was £4,161 and the monthly repayments are £62.68 per month.
I also have 3 others with norwich union but after seeing posts on here, they are showing big shortfalls but they are all older G&E policys and are all eligible for the payouts Ive had letters of N.U about them, this is the one im really concerned with at the moment
Any help really appriciated guyz
many thanks
Al

namralaks2001

I think you should look at the company which is managing the fund.If you can look at the company accounts for the lasst yr and find out what is their per unit expense as compared to well managed funds like Fidelity/LEgal & General.Please also look at the companies in which they have invesed your money.Are this blue chip companies?If not than you are wasting yr time.Cut your loss and get out.

dunstonh

You would expect any endowment taken out in 1999 to be in shortfall at this stage due to the short time it has been running and a moving of the goal posts on the projection figures. It doesnt mean it will come short though.

If with profits, then FP is awful on that front. I would look at the 4% figure. If unit linked, then FP have a range of funds which easily have the potential to perform in excess of 10% p.a. (and have been). A 1999 plan should be able to access the unit linked funds if you are not already in them.

Its then a case of looking at the ongoing charges against alternative modern plans and replacement life cover.

bigal993

Sorry Guyz
forgot to say it is in the with profit fund ?
is it possible to change over to the other fund ?
if not shal I cut my losses on this and cash it in, or try and sell it
Al

dunstonh

is it possible to change over to the other fund ?

If its the unitised with profits fund, then its usually possible to switch to the other funds available at no charge.

bigal993

Hi dunstonh
I have been reading about your great posts on the norwich union funds, Im sure I speak for a lot of newbies m8, your input is superb many thanks for your posts m8.
yes it looks like it is the unitised one, i have 2,880.06 units at 144.5p at the moment
Al

bigal993

Hi Guyz
I spoke to Friends provident today , after your advice, and i was amzed to find out, that the returns on this endownment have been a pathetic 0.75% over the last 2 years.
I have asked them to send me a list of the funds i am able to transfer into, and they are doing that, could i post here when i get them for some further advice on this,
many thanks
Al

EdInvestor

Check if there is a penalty to switch to other funds.Is it the same as the penalty you would pay if you cash it in?

dunstonh

Switching funds would not trigger the surrender penalty. Of course, you should check if there are charges but the vast majority will allow x number of free switches a year. A switch of one fund into 10 is classed as one switch. A switch of 10 funds into a different 10 is classed as one switch if its on the same form. So, its really number of switching forms a year that matters.

EdInvestor

Switching funds would not trigger the surrender penalty.

Err no.That's not what I said. What the OP should find out is if there is a Market Value Adjuster penalty applied on departure from the WP fund to another fund within FP, and if this is comparable to any surrender penalty ( which might include an MVA) which might be applied if he cashed in the policy.

After all if it's going to cost him the same either way, he might as well junk the whole policy and get a better risk based investment with bettewr likely returns if that's the way he wants to go.

bigal993

Hi Guyz
Got the form today, From F.P. and guess what, the funds that i can switch into no details were sent , Ive spoke to them and they said they are available to view online, Ive had a look at them and they might as well be wrote in chinese as i dont understand them any chance one of you experts could cast your eyes over them for me and see what you think is a sensible one to go for, here is the link to the funds

http://customer.friendsprovident.co.uk/fund_centre/life_funds/performance/index.jhtml

The expected reurns on this policy are on the 1st post, above, and there W.P policys paid out 0.75% last year which is abismal ?
many thanks Guyz
Al