aviva endowment help

sheilavw

Hi, I know I should have done something before now (circumstances included family/financial made it difficult too) Basically our 24k mortgage finishes end of next year 2013. It is served by 2 endowments took out with Norwich (now Aviva) . Both are different. The early one is with profits, the later one after we moved here isnt. One is for 15k which yesterday was valued at £8,576.15 with a bonus of £2.300.00 at the end. The other which was for 9k is £5430.00 this is less than last years figure. I have an appointment on the 15th at my bank. I am wondering if to put as much as I can each month in an ISA, or what other options are available. Are they both worth keep running, or is the one without worth cashing in. I realise other people are far worse off than us and its not a lot of money compared to what others are short. Thanks in advance

opinions4u

The with profits policy might have some sort of mortgage guarantee built not it.

Worth establishing before changing anything.

Overpaying the mortgage is probably the most effective way of dealing with shortfall.

dunstonh

Before you make any decision on whether to dump an Aviva endowment you must find out how much the Mortgage endowment promise value is (MEP). The MEP can be highly valuable.

Also, if you are talking cash ISA then it is fair to say that Aviva's WP fund has been performing with figures typically in excess of cash rates on average. Plus, you would have to consider the cost of replacement life assurance. If you are talking S&S ISA then you have to consider the cost of surrender and break even point and remember that returns will be unknown with that just as much as they are with the endowment.

The option really comes down to switching to repayment or overpaying the mortgage vs keeping the endowment (and ideally overpaying the mortgage at the same time).

sheilavw

Thanks will the MEP pay on the without bonus one? I have some old correspondence that does mention this . Thanks for all your help. Also I had thought of the life assurance so that is one reason to keep the endowments going. Basically on my figures am I going to be miles away or close do you think to meeting my 24k ?