Endowment - Maturity Value v Plan Value

LowerO

My final endowment finishes in a couple of weeks time after 18 years. I know it's going to pay less than originally planned (I received the Red Alert letters and have made alternative provision). In fact it seems it will return less than I have paid into it :mad:

However, the gripe is that my last statement in Sept 2011 stated that the plan value was c£21K whilst the possible low rate (4%) maturity value would be c£25K. The recent letter advising of the impending conclusion stated that the plan value was still currently £21K.

So my question is... is it likely that the maturity value will exceed the current 'total value'? Is there some maturity bonus that gets applied when the plan concludes?

Just wondering if I might get closer to returning the total contributions I've made over the past 18 years!!

dunstonh

So my question is... is it likely that the maturity value will exceed the current 'total value'?

Depends on the investments used.

Is there some maturity bonus that gets applied when the plan concludes?

If it is with profits then it is possible. if it is unit linked then no.


Is it unit linked or with profits?

Example projections showing 4% show what you would get if the returns in that period equated to 4%. If the returns were 6% you would get more. If the return was minus 5% then you would get less. 2011 was a negative year on the stockmarket. The last few weeks have been good though.

LowerO

Thanks dunstonh. From documentation it would appear that it consists of two elements... one has 'with profits' the other is unit linked and has an annual 'loyalty bonus' applied. So it may be that whilst the unit value is X, there could be an additional bonus element. I'll know in a couple of weeks!

Unfortunately it will still be less than the total contributions over the past 18 years!!

COLOURBOUNCE

dunstonh, would the past few weeks really make a difference to a policy maturing in the very near future? I am in this position and would be interested in your view.

dunstonh

dunstonh, would the past few weeks really make a difference to a policy maturing in the very near future?

A unit linked one is affected by daily values. So, in that case it would. A unitised with profits one would likely see fewer adjustments per year and less affected by short term movements. A conventional with profits plan can be updated as little as once a year. Fall the wrong side of the review and you miss out.