Standard Life to slash policies again?

Gorgeous_George

Over recent years the surrender value of my SL endowment has been reduced in Feb and Aug. It is now worth just over £2K less than it was 4 years ago (and I have paid in £2,160 since then).

Date......... Basic value........Final Bonus........Surrender value

Jan-03.......£16,428.34........£7,721.32........£24,149.66
Feb-03.......£16,263.74........£4,599.39........£20,863.13

Jul-03........£16,726.64........£5,273.91........£22,000.55
Aug-03.......£16,818.69........£4,411.81........£21,230.50

Jan-04.......£17,287.82........£5,359.23........£22,647.05
Feb-04.......£17,280.00........£3,000.00........£20,280.00

Jan-07.......£20,127.27........£2,012.73 ........£22,140

The big question is, are there likely to be further cuts?

Monthly increases since Oct 06 have been 0.72% (almost 9% per annum) which is quite good. My eventual shortfall will be in the order of £2K.

Further cuts would probably force me to sell.



GG

toonfish

you haven't allowed for any possible terminal bonus

dunstonh

The big question is, are there likely to be further cuts?

August 06 saw an increase in the bonus rate and next announcement is February. It's going to be an important one. Current returns would suggest an increase should occur but if there isnt one or there is a decline in the bonus rate it would suggest that SL used the demutualisation to give a short term hit and the with profits fund is in a fairly poor shape.

I would hold until the announcement in Feb. That said, I have only seen one standard Life endowment worth keeping in recent times (beyond demutualisation that is). Pulling out and moving to modern investments has been the best option in the others.

Gorgeous_George

toonfish wrote:

you haven't allowed for any possible terminal bonus

Thanks for the quick responses.

Without sounding too stupid, what would the terminal bonus be (in £££s)? Is it not the same as the Final Bonus?

For info, my (early maturity option) policy matures in 3 years and cost £45 per month from Feb 1985.




GG

EdInvestor

Terminal and final bonus are the same thing.

I would hope that the fund will have bottomed out now, as a result of the capital injection from the DM - or be very close to doing so. But there are still small MVAs on some policies, so it wouldn't be surprising to see a little additional decline, especially as the bond market has done poorly this year (40% of the fund is in bonds), denting the effect of decent performances from equities and property.

dunstonh

terminal bonus = final bonus.

three years to go probably means sit tight. Standard Life do have a history of suddenly increasing policies on maturity. They are well known for issuing amber warnings right up until 3 months before maturity but then the maturity pays on target or small surplus with all the increase coming on the terminal bonus.

RainbowsInTheSpray

dunstonh wrote:

terminal bonus = final bonus.

three years to go probably means sit tight. Standard Life do have a history of suddenly increasing policies on maturity. They are well known for issuing amber warnings right up until 3 months before maturity but then the maturity pays on target or small surplus with all the increase coming on the terminal bonus.

I have 5 years to go with Winterthur. They have paid no annual bonus for at least 4 years, to my recollection. Whenever I ring up to enquire they give out with the set speech, i.e. they HOPE things will be better next time and please keep giving them the money.

Does the 'sit tight' advice also apply in my case, would you think?

Gorgeous_George

Well, it's 1 Feb and I have just checked my policy.

Jan-07.......£20,127.27........£2,012.73 ........£22,140
Feb 07......£20,210.15.......£2,142.28........£22,352.43

So, no slashing of surrender values - yet.



GG

Rick62

Standard Life are pathetic and the Board should all be shot, or at least sacked. I thought about cashing in about 4 years ago, but then figured that the stock market had bottomed, was clearly going to recover and therefore decided to hold. Since then it seems to keep going down, in spite of further contrtibutions and a strong stock market recovery.

However, my thinking is that because the performance has been so dreadful that they will have become deliberatly overcautious and that therefore they will have been giving really rubbish bonuses and payouts currently with the intentiion that going forward that they increase payouts and exceed future expectations.

It is impossible to evaluate properly, as they make it up as they go along, but from both a corporate and personal point of view they can't afford to get it so badly wrong again in the near future, and this should ensure some kind of improved performance. I hope.

Gorgeous_George

Rick62

I understand your sentiments. I'm sure many would agree with your assessment of the board. Others would argue that the pas is the past and it's the future that matters.

I'm not sure what the future holds but with just three years left to run, I'm hoping that hanging on is the best bet.



GG

VickyM_2

Can I ask a really, really stupid question? How do you check your terminal bonus? do I need to ring them up?