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Endowment cashing in advice
Wrongway
Posts: 9 Forumite
I have a Minimum Cost Plan (80) - Early Maturity from Standard Life that has been going since 24 Nov 1988 and ends 24 Nov 2013 this year. I am paying £18.57 a month which provides the life assurance and should have given £12,200 for the mortgage. Luckily I paid off the mortgage when I retired so I dont worry about shortfall etc. However I could use the money at the moment and wonder what the full implications are of cashing it it now rather than wait until end of November apart from the loss of life insurance of course.
The current surrender value is £7509.40 with bonus added. And their maturity value for November cashing in is £7,730 at 3.75% growth, £7,810 at 5.5% and £7,880 @7.25%. I don't even know what the current growth rate is! So with £130 in payments left would I loose out much by cashing in now.
The idea is to pay off about £3000 debts and put the remainder in an ISA.
The current surrender value is £7509.40 with bonus added. And their maturity value for November cashing in is £7,730 at 3.75% growth, £7,810 at 5.5% and £7,880 @7.25%. I don't even know what the current growth rate is! So with £130 in payments left would I loose out much by cashing in now.
The idea is to pay off about £3000 debts and put the remainder in an ISA.
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Comments
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However I could use the money at the moment and wonder what the full implications are of cashing it it now rather than wait until end of November apart from the loss of life insurance of course.
Loss of the Mortgage Endowment Promise (MEP) value being a key thing. I have seen MEPs running into the tens of thousands. The MEP is lost on surrender.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
As I don't really understand the MEP, I am presuming it is just another way of saying I loose the £12,200 life insurance? Does it involve anything else?
edit: Just read up about the MEP. It says I could get between £280 and £420 extra or nothing. So it could be worth waiting.
If the growth rate is very low would I get less than it's worth now?0 -
I'm in a similar position i have an endownment policy that matures jan 2016 it has a mep of between £3360 and £5040 current value is £22320 but just rang them (standard life) and they said they are paying 15% final bonus so dont know what to do I needed £16k to use against my next home hence the cashing in
What about selling the policy do they pay much about the surrender value?0
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