Aviva Endownment Advice

penwise

I am not sure whether it is sensible to keep my endowment or if I could do better. Any thoughts / opinions/ advice on this would be greatly appreciated.

I have a 25 year endowment policy with AVIVA that had a target figure of 42,000

The current value of my endowment is about 23,000 and the surrender value is about 17,000

I pay in 67/month and there is about 7 years 1 month left.

letter just received – 8% /6%/4% was predicted at 33,900/30,100/26,700

There is also currently a mortgage endownment promise: short fall might be reduced by up to 4,800 ( I think I will be given at least 3 years advance warning if they can’t do this. )
I also have no dependants so the life insurance is nice but not vital.

dunstonh

They are not predictions. They are example projections. They also do not include the MEP. So, you can add that on top of those examples.

You would lose £6000 straight away due to cost of surrender and lose the £4800 MEP. So, money lost due to surrender is £10,800. You have £5695 yet to pay. So, your net loss by surrendering early is £5105 and that ignores any future growth.

Would any alternative you use make up that £5105 plus growth in the next 7 years?

penwise

Thanks for reply - my main concern is that the projections will fall even further and the MEP is not guaranteed until closer to the maturity date

dunstonh

penwise wrote: »

Thanks for reply - my main concern is that the projections will fall even further and the MEP is not guaranteed until closer to the maturity date

The MEP is fully funded and shows no signs of being withdrawn. Projections are trending up at the moment but the future is always unknown. However, any alternative would have to make up £5000 even if you assumed no more growth.