Scot Am endowment -stay or go?

owly1

Hi

I have a Scot Am [now part of pru] endowment maturing 2016 [after 23 yrs] with target amount 30K
Surrender value 16K now

projection [red letter]
4% 22100, 6%24300, 8%263700
Monthly cost £54
believe that the should be a terminal bonus but not guranteed etc.

Wasnt mis-sold and its the sort of endow that people wont buy from you
Have still [only] a 7.5K mortgage [fixed at 0.5% over BOEBR till end (2016)]
so majority of any cash now would be reinvested and mortg. paid off fully later [i am a 40% taxpayer]

Given all the above would you cash in the 16K now [and invest] or hold on for uncertain maturity value affected by current inflation?

All comments appreciated
Owly's no fool but no expert neither

owly1

4% 22100, 6%24300, 8%263700 - should be 8%26370 !!!

sheslookinhot

Hi

I am in a similar situation with a Scot Am endowment maturing Jan 2015 [25 yrs] with min death benefit of 46,000. guaranteed value 25,000

projection [red letter]
4% 32,500, 6% 38,000, 8% 44,000

I am hoping for £30,000, anything else is a bonus.

Monthly cost £61, so about £1,900 more to invest.

As you say, there could also be a terminal bonus.

The morgage is clear so effectively a saving/investment vehicle now.

Pru policies are regarded as one of the best remaining endowments of this kind. I will be keeping mine to maturity.

owly1

Hi

Thanks for the reply - I also have read good reports about Pru performance - they seem to suggest 6% as a fair quote of ongoing long term growth ! Hmm I wonder what they define as long term?
Seems a good rate compared to current investments (with lower risk) but its a tricky calculation given inflation and estimated final sum.

So far : stay on the bus 1, get off and hitch 0

Anyone else got a view?

Once again thanks "sheslookinghot" for your reply

whizzing

I am in a similar situation. But I was told that there is no terminal bonus with the kind of policy I have. You should check this again. Expecially as you describe it as not the sort of endowment anyone will buy. Can you tell me why not? I thought that might be the reason it was not sellable ie it has no terminal bonus so no gamble for the buyer, if you see what I mean. As mine has no terminal bonus then it becomes a question of whether I can invest the money elsewhere with as much return, for less risk. I do feel the endowment is pretty risky as one year it dropped by 8%, what if that were to happen again?