Endowment update: payouts still falling

EdInvestor

dunstonh wrote: »

In 2005, 100% of Pru maturities hit target and paid an average surplus of £2,200. In 2006, 100% of Pru maturites hit target and the average surplus increased to £3,300. Trend is upwards. Unit linked endowments from most providers are seeing big increases in values over the last 4 years as the stockmarket recovers.

But this accounts for only a small proportion of the total number of endowments.

A bad endowment is likely to remain bad. However, a good endowment is worth keeping. A lot of these media articles focus on the bad and make no mention of the good..

Just check the chart from Money Management attached to the article (link in top post) to see which ones are bad.

Almost all of them, I'm afraid

angela110660

In the late 70s/early 80s I worked for a building society and the endowments maturing at that time were mega compared to the actual mortages they were paying off from the early 60s. Like all things, endowments were the best thing since sliced bread, then it was pensions - they have had their day really. So what will the next best thing be??
All I know is that I would not like us to return to the horrendous interest rates of those times - so low interest rates - low savings returns. We have to accept it as a fact of life.

Dithering_Dad

Makes me glad I got rid of my SL endowment the other day. I feel better already and will feel even more delighted once the endowment stipend I received is snug in my mortgage with regular additions from the endowment premiums!

I have been to an IFA twice in my life and came away with an endowment for my mortgage on the first occasion and on the second occasion came away with 2 Friendly Society Child Bonds and 2 Friendly Society Scottish Bonds (yes, £100 per month investment into these virtual endowments). Not sure what I should do with these babies. Two of them have 3 years left to run, one has 10 yrs and the other has 12 yrs left. Any ideas?

netty_betty_2

we have a unit linked endowment policy which matures in five years time, at the moment it has made exactly half of what we need to cover the amount we borrowed,i am not very clued up when it comes to financial matters,and i wondered if anyone has any advice or information on the unit linked policy, does it look likely to make a recovery?

Mr_helpful

Netty
It needs to grow by about 14.5% per annum. Which is not impossible but is rather unlikely in todays economic climate

absolutebounder

dunstonh wrote: »

One of the advantages of being self employed is that I dont have to deal with small, closed minded individuals who think everything they read in the Daily Mail is real.

There is no point discussing/debating the issue with someone who doesnt know anything about it, doesnt want to know anything about it but wants to tell everyone else what they think about it. I smell a troll.

Does anyone here believe the Mail. I thought they advised everyone to get an endowment in the late eighties early nineties. And didnt they sing the praises of with profits pensions
I thought everyone believed the Sun these days

EdInvestor

Dithering_Dad wrote: »

...on the second occasion came away with 2 Friendly Society Child Bonds and 2 Friendly Society Scottish Bonds (yes, £100 per month investment into these virtual endowments). Not sure what I should do with these babies. Two of them have 3 years left to run, one has 10 yrs and the other has 12 yrs left. Any ideas?

Get surrender values from them and we can have a look.These F/S bonds are usually awful products, very high charges and low returns.

Gorgeous_George

EdInvestor wrote: »

Latest edition of the authoritative Money Management survey show that the final payouts on endowment policies are still falling at almost all life offices.Most are paying out half what they were at the peak - or less.

Endowment payouts have been disappointing mainly because previous payouts were bigger numbers. That doesn't in itself mean that endowments have been poor investments. Inflation has been, and continues to be, very low. The true value of the payout is better than the graphs may suggest.


The chart shows that a £50 endowment with SL would return £38,338 in 2007. I make that a 6.65% average annual return TAX-FREE. Is that really so bad considering endowments include life insurance?

Red Rose's return is nearer 9.7% and again, tax-free.



GG

Mr_helpful

There si another point that people are not making.
When I was an IFA a like for like quote often showed the endowment plus mortgage monthly payment to be cheaper now this may well have been because the projections on the endowment were to generous but nethertheless they wer properly created qutes in line with the PIA.
Most customers chose the cheapest quote but if the £20 or £30 they were saving had been put into the endowment the figures would have been very different

jamesd

netty_betty, probably won't make it, I suggest that you start a new topic with details of when it started, when it finishes, the units and current values. Then it'll be possible to get some idea of how it might perform and what you should do to cover the mortgage.