Prudential windfalls

Misstique

Hi all, I had a quick search and didn't see this posted anywhere.

If you are considering selling your endowment you may want to consider this.

http://news.bbc.co.uk/1/hi/business/6453173.stm

dunstonh

You may also wish to remember that Pru have not had an endowment mature yet that has had a shortfall. In 2005, 100% paid out in surplus with £2,200 as the average surplus figure. In 2006, it was also 100% with an average surplus of £3,300. (Even Scot Am plans have a 95% record in 2005 and 96% in 2006).

Anyone who has checked their final bonus on their Pru plan in the last month would have seen quite a jump in value.

Primrose

I just posted a question about whether Prudential With Profits Bond holders were likely to benefit from the proposed shareholder pay out elsewhere but posting seems to have disappeared. Have held my With Profits Bond for several years. Is it worth hanging onto, and if so, is a payout for bondholders likely?

EdInvestor

http://forums.moneysavingexpert.com/showthread.html?t=404010

Answered on link above.

Misstique

Hi Dunston

Do you know if your figures regarding payouts apply to scotam unitised mortgage plans as well? I was missold one of these and had my complaint upheld . I didn't receive a payout because I was not at a financial disadvantage because I had changed my interest only to repayment a few years earlier.

Do you know if unitised plans are worth selling on? I tried to sell on and it was declined this is when I became aware it was unitised and not a with profits policy which prompted my complaint about misselling.

Hope that makes sense!

EdInvestor

Only conventional With profit endowment policies with a guaranteed value can be sold.

The following can't be sold:

Unitised With profits policies
Unit linked policies
50/50 hybrids containing half unitised WP and half unit-linked.

dunstonh

Do you know if your figures regarding payouts apply to scotam unitised mortgage plans as well?

Those figures were all their plans. The 2006 figure was a provisional figure and hasnt been confirmed but they had a better than expected year so it wont be any worse.

Unitised plans cannot be sold on the TEP market as they dont have the retained value that is present on conventional with profits plans.

Misstique

Thank you Ed and Dunston, does that mean that polices can only be surrendered or held to maturity?

This makes me really angry if this is the case because I really thought I was buying a with profits policy and am still not sure if I should sell it and invest elsewhere.

EdInvestor

Misstique wrote: »

Thank you Ed and Dunston, does that mean that polices can only be surrendered or held to maturity?

As above, depnds on the type of policy.You can also make them "paid up", but this is rarely a good idea.

This makes me really angry if this is the case because I really thought I was buying a with profits policy

Unitised WP is a type of WP.BTW, not all conventional WP policies can be sold - TEP traders don't want underperforming policies and that applies to many endowments these days.:(

and am still not sure if I should sell it and invest elsewhere.

You can surrender it and invest elsewhere.

Misstique

Thanks Ed, I may as well hang onto it for the potential windfall and keep it as part of my pension pot.

dunstonh

Pru have one of the strongest with profits funds out there and that is reflected in their bonuses. There isnt many providers that can achieve 10% a year average on their with profits fund.

A unitised with profits fund is still a with profits fund. It is just built in a more explicit way and there are not as much smoke and mirrors as they was with conventional with profits.

As it happens, a unitised with profits should do better than conventional with profits as the unitised plans are usually based on when you make your contributions and more closely linked to performance of the underlying fund than a conventional with profits plan which may suffer legacy issues and be paying for other things.