Endownment, what to do now, please help!

gifford4671

Hi I have an Equity & Law endownment which is due to mature in 2016 after 25years. It is guaranteed to pay out £18479, the target was £40k plus bonuses. :mad:

I have looked into claiming as I was sold it when I was in the RAF by a broker who used to sit in the airmens mess. However the company no longer exist and the Financial Ombudsmen have not been much help.

My question is I am still paying £62 per month into the policy, should I;

1./ Leave it alone and wait until the maturity date
2./ Cash the policy in now and put the £62 into something else
3./ Sell the policy to one of these companies who advertise on telly.

Please help me if you can as I am not sure what to do , my fear is if I stop it now I will lose a lot of money as it is near it's maturity date. :eek:

Thanks for any and all replies :T

jackomdj

I am no expert (& I am sure one will be along soon), however I recently cashed in mine for £12k, it still had 10 years to go & I was paying £75 per month - as it was not a "with profits" policy I was unable to sell it.

My reasoning for doing so was I have an offset mortgage, so I am getting in effect 6.5% interest on the capital from day one. Plus I am still transfering the monthly payments into my offset savings account so getting that at 6.5%. I took out some new life cover which was relatively cheap & gives substantially more than the cover I had with the endowment.

Hope this is of some help. I guess you have to work out what you will "use" the money for to benefit you best.

Nicky

EdInvestor

gifford4671 wrote: »

Hi I have an Equity & Law endownment which is due to mature in 2016 after 25years. It is guaranteed to pay out £18479, the target was £40k plus bonuses. :mad:

Post some info about it

Guaranteed sum assured
Declared bonuses
Surrender value
Maturity forecasts

lnterest rate payable on mortgage.

gifford4671

Thanks JackoMDJ, I to have an offset mortgage, I had thought of using the money to pay off some of my mortgage. :T


Edinvestor, maybe you can help with the technicalities of that;

Would paying off a chunk of the mortgage with whatever the value is now be better than waiting until full maturity and paying off a chunk of the mortgage with the mature value? Some figures as requested;

Current Mortgage debt is £97,000
House is worth approx £200,000 :money:

Guaranteed sum assured = £18479
Declared bonuses
Surrender value
Maturity forecasts, I think this is around £23,000, it was designed to pay off a mortgage of £40,000, at the maturity date I will of paid into it approx £17,500 :mad:

The mortgage interest rate is 6.5%

The last three I will contact AXA and get up to date figures, as you can see the endownment is not designed to pay off the mortgage as I gave up on that a long time ago, :rolleyes: so I am treating it as an investment, I was just wondering if I was better doing something else with the £62.

I will post again when I have those other details.

Thanks for your replies guys. :A

dunstonh

Also ask them for the terminal bonus currently accrued on the plan as you will need that to make any analysis complete. The bulk of the returns are going to be in the terminal bonus and if you dont have the figure then any analysis or projection will be flawed.

defender_of_the_weak

What was the name of the broker and company. We have seen many similar cases and often what is required is a little more digging to find the true identity of the advising company. If they no longer exist then your case should go to the Financial Services Compensation Scheme, FOS is no use in these circumstances.

PM me if you dont want to put the name on the forum, but it may help someone else in your situation

gifford4671

Hi Defender of the weak,

The brokers name was George Taylor but he has long retired, the company was;

Breckland Insurance Brokers
11 Market Hill,
Brandon
Suffolk
IP27 0AA

I did contact the FSCS but again they were not much help, they said something about Breckland having been sold and the new owner was not liable for any previous policies??

dunstonh

I remember them. Back in my tied agent days, I covered one of the banks that had an office in Brandon. I cannot remember when he closed though and he and the firm are not listed on the FSA register.

I did contact the FSCS but again they were not much help, they said something about Breckland having been sold and the new owner was not liable for any previous policies??

That would normally mean the FSCS would step in and the complaint would go through them. The FOS would be of no use though. Have you got your F initials right? Unless he was FIMBRA registered and left before 1994.

gifford4671

Hi dunstonh,

Thanks for the reply:A

I have a headed letter from them which at the bottom has a FIMBRA stamp.
I had been to a beer call so was a bit merry when I signed up for the policy outside the airmens mess, I was informed the policy might not perform as forecasted and it does say this on the forms I had, but I was sold the policy on the understanding it would pay off a mortgage of £40k and a bonus of up to £18k on top so the positive was definitely emphasised.

So do you think I should go back to the FSCS or should I just look into cashing it in and re-investing or pay off a chunk of the mortgage?

Cheers Mark

gifford4671

Hello guys,

OK I have some figures now,

Guaranteed sum assured = £18479
Declared bonuses = none
Surrender value = £12422.95
Maturity forecasts = to come in the post but due to mature in 2016
Terminal bonus currently accrued = £1567.35

My monthly premium is £62

EdInvestor

gifford4671 wrote: »

Thanks JackoMDJ, I to have an offset mortgage, I had thought of using the money to pay off some of my mortgage. :T Would paying off a chunk of the mortgage with whatever the value is now be better than waiting until full maturity and paying off a chunk of the mortgage with the mature value? Some figures as requested;

If you surrendered the policy and used it either to reduce the mortgage @6.5% or offset it, also overpaying the mortgage by the endowment premium, then your return at maturity would be 30,929.

You should compare that figure with their maturity forecasts.

Bear in mind that the policy also provides life cover, so if you need to replace that, the cost should be deducted.