Standard Life - How much will my policy be worth tomorrow?

dunstonh

MissMoneypenny wrote: »

I'm enjoying reading this thread GG. It reminds me to think about my Standard Life Endowment. Although my policy matures after yours and doesn't have the mortgage promise. They told me mine was on target when that was offered and it was only for policies taken out after mine. I hope they weren't fobbing me off.

That is correct. However, the upside is that you have less of a shortfall position to recover and that gives you the greater chance of hitting target and possible surplus.

MissMoneypenny

dunstonh wrote: »

That is correct. However, the upside is that you have less of a shortfall position to recover and that gives you the greater chance of hitting target and possible surplus.

Do you think they will still hit target? I have had a red alert letter from them. Another upside is that I did get the share money from them and a mis-sale payout.

I don't have a mortgage now, so like GG, I was thinking about selling it. It is a 23 year endowment which matures summer 2011. I already have alternative life cover. It has just become a form of savings now. Part of me wants to keep it to see if it makes the target, while another part of me is telling me to sell it and put the money and the future premiums of £51 pm, in something more certain.

dunstonh

Do you think they will still hit target? I have had a red alert letter from them. Another upside is that I did get the share money from them and a mis-sale payout.

Many endowments with shortfall projections go on to pay a surplus upon maturity. You just have to look at GG's figures as little as 6 months ago to see that the shortfall position has changed massively and is trending to a surplus.

The problem with projections on conventional with profits plans is that they often do not include terminal bonus to date, are projected from the surrender value and not a current value (so includes any penalty which wouldnt exist on maturity. This also explains why some projections improve quicker than you would expect as surrender penalties reduce as time goes on). Some of the projection rates dont reflect the real returns either.

The last SL endowment I reviewed was growing at an average of 7.1% p.a. The growth rate required to hit target was 7%. The original illustration was available and at the point of review, the endowment was above track to pay a surplus based on that. However, the projections now showed a shortfall because of the various limitations and that the projected rates were lower than was actually being achieved.

Whilst some endowments are dire, some are very good and many are average. Too many good endowments have been surrendered and too many bad ones are being kept because of misreading the information that is supplied or not realising the limitations.

It was only a few years ago that the lowest projection on standard Life plans gave a figure that wasnt technically possible because it was lower than the guaranteed minimum.

MissMoneypenny

Thanks for this dunstonh. I'll have to get as good as GG and get the figures more often.

Sorry to invade your thread GG.

Gorgeous_George

Happy New Year everyone.

The policy is now worth:
Basic value...£21,126.10
Final bonus.....£4,351.78
Total...........£25,476.88

SL's forecasts are:
3.75%...£28,400
5.50%...£29,400
7.25%...£30,400

As a reminder, the policy matures in Feb 2010 and costs £45 per month. I will sell if I'm offered a little extra but, TBH, I can't see why I would be offered any extra. What is in it for the buyer at this late stage? My mortgage is BR + 0.74% and I can lump this cash in the offset account at the same rate (effectively tax-free).

GG

silvercar

If you sell, will you still get valuations and forecasts?:)

Gorgeous_George

silvercar wrote: »

If you sell, will you still get valuations and forecasts?:)

Good question. I doubt it would be morally right for me to have online access to the account. However, I don't think morals are all they are cracked up to be.



GG

silvercar

I've got endowments maturing in 2011 (L&G), 2013 (SL) and 2018(SL-U/L). I'm in 2 minds whether to cash / sell them and reduce the mortgage now or keep them going and utilise the lump sums when they come through. Have other strategies for repaying the mortgage.

But I will always want to know which decision was the best and if I cash them in I'm not sure I will ever know what they could have been worth.:)

Gorgeous_George

I think the stockmarket will suffer a massive crash this year. When I look at the surrender values, I'd like them to be guaranteed - but they're not. On SL's past performance I could lose a lot more than I could gain (my opinion only, of course).

I guess you pays your money and takes your choice.



GG

Gorgeous_George

My policy usually changes value on the first day of the month.

Just had a quick look tonight - must be a sixth sense (and the bonus announcement) and the surrender value has changed.

The policy is now worth:
Basic value...£21,126.10
Final bonus....£4,098.27 (was £4,351.78 on 01 Jan)
Total...........£25,223.37 (was £25,476.88)

A LOSS OF £253.51 this month - d'oh!

SL's forecasts are:
3.75%...£27,700 (£28,400)
5.50%...£28,600 (£29,400)
7.25%...£29,500 (£30,400)

Last February it was worth £22,352.43 so it has risen by £2,870.94 helped, in part, by my £45 monthly premium. I make it a tax-free rise of nearly 10% (accounting for the extra premiums) so it may have been worth keeping for the past 12 months.

Keeping it for one month wasn't the best move I've ever made. And I still have my shares which also fell again.

Time to bail out? Is it just the Final Bonus that is at risk if I stay?

EDIT to add: Interestingly, Mrs GG's policy has not changed since Tuesday and stands at £14,634.90 (started 1990).



GG