Standard Life Endowment. Help Please!!

Mr_helpful

EdInvestor wrote: »

The main thing you have to decide on these days is whether you still want to take a risk with paying off your mortgage, when the chances are that you could be worse off if you do.

Or whether you want to risk one of you kicking the bucket without th elife assurance.

Most people were sold endowments on the basis they would pay off the mortgage and produce an additional lump sum.Now, many (possibly most) of them will not even pay off the moprtgage, much less produce anything extra.

And you forecasted that 20 odd years ago did you when endowments were doing quite well

Unfortunately many SL endowments fall into this category.This is because SL lost a massive chunk of the money reserved for terminal bonuses in the market crash (no less than 8billion quid of the policyholders' money was lost by the incomptetent management) . :mad:

How was it miss management. Are you saying you never lost anything on the stockmarket? I have spoken same years ago to one of SL's investment managers and asked him how come he didnt see the crashes. His reply was that they see them ok but if they were to withdraw suddenly several billion they would cause a crash by themselves

This money is lost forever - it can never be regained.Management has stated that terminal bonuses are still on a declining trend.There is very little point in holding onto this policy when you can get a guaranteed higher return by using the money to pay off your mortgage (which was, after all, the whole point we should remember.......:rolleyes: ) .

Its interesting you say "you can get a guaranteed higher return by using the money to pay off your mortgage" I think this is the very sales talk that you complain about. If Joe or Dunston said that the FSA would probably kill them.

catsneel

If we cash the policy in before maturity, will we get a percentage of a bonus? or just the cash in value?

patman99

Talking as someone who was in this very position at the end of 2006, I got a surrender value from SL that was greater than the amount paid-in. My policy was taken-out in 1991. After 10 years it was worth less than the the contributions made.
If you can afford too, hang on to it for another 5 years, then review the value again. As this policy also seems to include life cover, you should speak to an IFA as to whether you need your seperate life cover.

EdInvestor

catsneel wrote: »

If we cash the policy in before maturity, will we get a percentage of a bonus?

Yes of course. But as you know terminal bonuses at Standard have sunk to virtually nothing on more recent policies because they lost the free assets in the market crash.

If you ring them up, they will tell you how much of the surrender value is terminal bonus.

BTW if you need the life cover in the policy, it's sensible to check out the cost of that before surrendering.Life cover is pretty cheap these days, much cheaper than when the policy was taken out, so it doesn't usually cost much.

dunstonh

But as you know terminal bonuses at Standard have sunk to virtually nothing on more recent policies because they lost the free assets in the market crash.

Terminal bonuses SANK but have been rising again.

JoeK_3

catsneel wrote: »

Joek,
Sorry to have offended you by refering to you as 'someone', it wasn't intentional at all. I really do appreciate your professional advice here.

I do not intend to give financial advice on a public forum but your circumstances are typical and exactly the reason that we deplore everyone being told to cash in endowments on a whim by people least qualified to do so.

catsneel wrote: »

In answer to further questions asked. We are both in good health, non smokers or drinkers and have 3 dependant children.

If you cash in your endowment, you will be left short of being able to pay off your mortgage!

Who will come in and help you if one of you were suddenly to die prematurely?
Would you be able to meet your mortgage payments?

catsneel wrote: »

My husband is the main wage earner, i work part-time.
Hopes this further helps, thanks.

You don't state your husbands income but how would you be able to cope with the children, a mortgage and work part time?

Sorry to let off steam.

JoeK

keith1966

just some further thoughts(sorry if someone else has covered as i just skim read the thread)

1) have you tried to get compensation for being mis sold this policy(standard life have to prove from proposal papers that you were fully aware of the risks?
2) Have you thought about asking them to put the status on the policy to 'paid up' Basically you stop paying the £85/month but leave the money invested with them, you will lose the life cover as well i think?

catsneel

Thanks for all above comments.
Yes ' Keith 1966' we received about £3,000 in compensation about 3 years ago. and have thought too about having the policy'paid up'.
Our income is roughly £26,000.
We have no one to help us should one of us die, and yes it is a worry as to how one of us would cope if the mortgage was not paid off . So ,food for thought there . Mmmmm.
Thanks for all contributions.

JoeK_3

catsneel wrote: »

Thanks for all above comments.

Our income is roughly £26,000.

We have no one to help us should one of us die, and yes it is a worry as to how one of us would cope if the mortgage was not paid off . So ,food for thought there . Mmmmm.
Thanks for all contributions.

This is a typical case of why you should not be told to cash in your endowment before seeing an IFA first.

Take note Edinvestor!

JoeK

EdInvestor

Obviously if you need the life cover, you should replace it before surrendering the endowment.Life cover is very cheap these days, so it's likely you would still be ahead.