Selling Standard Life endowment

bobber

Hello

Ive got a SL endowment that matures in 2017. I've remortgaged and no longer need it for my mortgage (got replacement life cover too). The house we've now bought requires about £20,000 spent on it (not urgent work but will definitely need to be done at some point in the next few years or so). We havent got any other savings to pay for this work, but are really trying to save now.

Current surrender value is 9596 (cant be sold)
25 year matures in 2017 - premium 50.20
Projections for 2017 are 20,000 23,300 27,200 with 6425 premiums left to pay.

I havent got a clue about whether im shooting myself in the foot if I surrender now, later or wait until it matures. My gut feeling is to take it now and put it in high interest account and start to pay off each renovation job as its done - but Im not clued up on finances enough to know if its a good thing to do.

I know its a bit of a crystal ball job, but I'd really appreciate any advice from anyone with more knowledge than me please.

dunstonh

Std Life announce their bonus in a few weeks. I would wait for that as those that have already announcemed have shown improvements. Std life isnt likely to be as good as the others but daft dumping now when a jump could be likely in a few weeks.

bobber

Thanks for that dunstonh.

Would my Homeplan policy qualify to gain anything from the bonus announcement, even though its one that cant be sold?

Just feeling a bit paranoid now - my policy appears to have fallen in value over the last few months, and checking online today its just gone down again £25 from yesterday and is worth less now than it was before my January premium went in

As I said yesterday, Im not clued up on this enough to understand it fully, so does the amount possibly go down soon after a premium goes in and then goes up as the month progresses, or is that just wishful thinking? :question:

EdInvestor

Is any of it invested in the With profits fund?

bobber

Hello EdInvestor

Yes it is with profits. The plan type on some paperwork is called 'Lowstart Homeplan (Unit-Linked Endowment)' and the name of fund on other paperwork and on yearly statements is 'Life With Profits (proportion 100%)'.

bobber

Hello again

Well I checked my surrender value yesterday & it had gone back up in value over £70 from the day before and was worth £9647.68. :j The future projections had gone down slightly though, which seemed strange to me. Cant get my head round how all of this works.

Anyway, I checked this morning and its fallen slightly to £9641.06.

So shall I pull the plug today before it goes down any further? I know its crystal ball stuff, but on balance, I dont think it appears worth holding on to any longer.:o

Can anyone of you kind wise people tell me if I've made the right decision please?

Thanks!

EdInvestor

bobber wrote:

Current surrender value is 9596 (cant be sold)
25 year matures in 2017 - premium 50.20
Projections for 2017 are 20,000 23,300 27,200 with 6425 premiums left to pay.

If you surrendered it now and put it on deposit @4.5% net, also paying in the premiums to maturity, you should end up with 22,524, close to their mid projection, but involving no risk of course.

And that's the problem really, there's no real premium for taking a risk any more.As with most of these policis, it's best to either junk them and use the money for a proper guaranteed savings account (and achieve much the same return) or invest in modern performing fund with low charges and look for a a premium return to repay you for the risk.

Standard Life do have some quality funds it must be said, and it would IMHO be worth looking into the idea of moving the money out of WP and into a selection of good ones.Ask them what your options are and what charges you would pay if you took that route.

If you can move within the company it would be worth considering until you actually need the cash for the renovations.

bobber

Thanks for that EdInvestor.

I hadnt worked out what I could earn from the same going into in a safe savings account - thats much better than I thought and theres no risk involved, which suits me much more.

We'd really like to start on some of the work on the house quite soon as its so overwhelming having SO much to do up and living in such a state, so there would be a bonus in that for our quality of life.

I'll have a look over on the savings board to get some ideas for setting up a separate savings account, aside from the the renovations money, as a safety net for us.

Thanks again

xtratime

Looking at todays bonus announcement, it seems very positive citing double digit figure growth plus possible redistribution of a £500m fund. It also seems to have held most of this in reserve for future payouts. Does this maybe indicate that it may well be worth holding on a bit longer?

bobber

Really sorry for dragging this up again.

Just when I thought Id made my final decision to cash it in, I stalled as it went up in value on Friday by £35 and then again today by £20(surrender value now is £9693).

I know its not much money in the grand scheme of things, but am wondering whether to hold off surrendering for a week or so to get a little bit more? Or am I being daft?

Is it just the 'after effects' of the bonus announcement - and the value now will level off in the next few days?
Or is it just a random thing that you cant predict, like a gamble, and some days it goes up a bit and other days it drops (that sounds horribly explained, sorry:o ).

EdInvestor

Perhaps they've invested the WP fund in Standard Life shares

(joke)

It is a random matter, depends on the performance of the stock and bond markets.