We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Plod on with endowment or sell ?
wingman_2
Posts: 1 Newbie
can anyone offer any advice ?
I have 10 years to go on my standard life endowment. it costs £45 a month and has a current surrender value of £9900. It was to pay off the mortgage (£34K) but is forecast to be worth only £19.5k at maturity(assuming @ 5.55 growth per year).
It is now used as a savings policy as I have alternative life cover and no mortgage. Would it just be better to sell or surrender it, bank the money and still end up with around £20k in 10 years time ? My only concern is if an investor is paying money to buy this policy, then is it worth more than the forecast £19.5k ?
I have 10 years to go on my standard life endowment. it costs £45 a month and has a current surrender value of £9900. It was to pay off the mortgage (£34K) but is forecast to be worth only £19.5k at maturity(assuming @ 5.55 growth per year).
It is now used as a savings policy as I have alternative life cover and no mortgage. Would it just be better to sell or surrender it, bank the money and still end up with around £20k in 10 years time ? My only concern is if an investor is paying money to buy this policy, then is it worth more than the forecast £19.5k ?
0
Comments
-
IMHO you would be better to sell it for 5-10% more than the surrender value and then reinvest the money in a maxi ISA through a discount broker such as https://www.h-l.co.uk ,choosing a selection of quality funds.
Old endowments have high charges, no tax relief and very poor fund choices.
As investments they are obsolete and should be replaced.Trying to keep it simple...0 -
EdInvestor wrote: »IMHO you would be better to sell it for 5-10% more than the surrender value and then reinvest the money in a maxi ISA through a discount broker such as https://www.h-l.co.uk ,choosing a selection of quality funds.
Old endowments have high charges, no tax relief and very poor fund choices.
As investments they are obsolete and should be replaced.
I was offered just 3% more to surrender my policy so 5-10% may be difficult to find.
My policy matures in Jan 2010 and is also with SL at £45 per month. I have been disappointed with the cuts that policies suffered in recent years however, the value since Sep 06 has increased by approximately 7% p.a. tax free. I have a mini-cash ISA at 6% and my mortgage is less than 7% even after recent IR rate hikes.
Sep 06......£21,512.62
Oct 06......£21,668.06
Nov 06......£21,824.08
Dec 06......£21,982.74
Jan 07......£22,140.00
Feb 07......£22,352.43
Mar 07......£22,525.33
Apr 07......£22,698.95
May 07......£22,873.27
I'm happy to keep my policy to maturity unless someone offers me substantially more than a 3% premium. Ed's 10% would see me selling.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
My policy matures in Jan 2010 and is also with SL at £45 per month. I have been disappointed with the cuts that policies suffered in recent years however, the value since Sep 06 has increased by approximately 7% p.a. tax free.
Endowments (unlike ISAs) are not tax free. Gains are taxed at 20% within the fund and this cannot be reclaimed.Trying to keep it simple...0
This discussion has been closed.
Categories
- All Categories
- 346.7K Banking & Borrowing
- 251.4K Reduce Debt & Boost Income
- 451.4K Spending & Discounts
- 238.9K Work, Benefits & Business
- 614.3K Mortgages, Homes & Bills
- 174.8K Life & Family
- 252.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 15.1K Coronavirus Support Boards