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Endowment - How to dump and should I?
EalingSaver
Posts: 365 Forumite
I'm sure there must be threads and or articles which would give me some basics to start with, but I couldn't find them. So here goes.
I have a Guardian Freedom For Home Buyers endowment policy which I've had for about 15 years. My gut instinct is that the money could be invested better elsewhere. My current mortgage is fully paid off and I can't believe that the life protection benefit element can be the best way to get life cover (which I now have separate cover for anyway). After all it was really there initially to protect the lender I guess.
The cash-in value is about £17, 500. It is split approx 21% in 'Equity' and 79% in (mis?) 'Managed' funds. Monthly payments are about £83. Life Protection is currently £8.61 of that (and boy has it taken me a long time to get this breakdown out of Guardian). Its non-qualifying, and the 'gain' stands at a touch under £2.5k. Not a lot to show for 15 years of payment. And I'm a higher rate taxpayer (though not sure whether this will qualify as capital gain liability or income). Oh, management charges are about £4 a month - but I have to think that this is probably additional to 'hidden' management charges that are being charged by the 'managed funds' element, though of course I may be wrong.
Its been pretty much impossible to get raw numbers out of Guardian re. the actual performance of the underlying funds (e.g. year by year performance numbers). And for that reason alone I'm inclined to disinvest and put it somewhere more transparent.
Options I guess I have:
1) keep it and keep paying in. Probably stop the life protection element (which I understand is an option).
2) Keep it invested but pay no more in.
3) Disinvest. If so do I simply cash it in with Guardian, or is there merit in 'selling it' and if so how? My understanding is it is NOT a with-profits, so I'm not sure that anything other than cashing it in with Guardian makes any sense.
Comments/help from anyone?
I have a Guardian Freedom For Home Buyers endowment policy which I've had for about 15 years. My gut instinct is that the money could be invested better elsewhere. My current mortgage is fully paid off and I can't believe that the life protection benefit element can be the best way to get life cover (which I now have separate cover for anyway). After all it was really there initially to protect the lender I guess.
The cash-in value is about £17, 500. It is split approx 21% in 'Equity' and 79% in (mis?) 'Managed' funds. Monthly payments are about £83. Life Protection is currently £8.61 of that (and boy has it taken me a long time to get this breakdown out of Guardian). Its non-qualifying, and the 'gain' stands at a touch under £2.5k. Not a lot to show for 15 years of payment. And I'm a higher rate taxpayer (though not sure whether this will qualify as capital gain liability or income). Oh, management charges are about £4 a month - but I have to think that this is probably additional to 'hidden' management charges that are being charged by the 'managed funds' element, though of course I may be wrong.
Its been pretty much impossible to get raw numbers out of Guardian re. the actual performance of the underlying funds (e.g. year by year performance numbers). And for that reason alone I'm inclined to disinvest and put it somewhere more transparent.
Options I guess I have:
1) keep it and keep paying in. Probably stop the life protection element (which I understand is an option).
2) Keep it invested but pay no more in.
3) Disinvest. If so do I simply cash it in with Guardian, or is there merit in 'selling it' and if so how? My understanding is it is NOT a with-profits, so I'm not sure that anything other than cashing it in with Guardian makes any sense.
Comments/help from anyone?
0
Comments
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why not find an independent finaancial advisor to help you?I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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