Should I surrender?

daddypuff

Hi

I am wondering what the best way forward is for me and looking for advice.

I have an endowment which expires in Dec 2015 I pay £30 per month. This is to pay off a mortgage for £48500 which is repayable on the same month. The payments of the mortgage are £293 per month. I am expecting the stock markets to take a big tumble during this period.

Would it be wise to cash in now and pay off the mortgage early say July 2014. This would of course save me the following:

18 payments of £30 (Endowment) = £540 and
18 Payments of £293 (Mortgage) = £5274
Total saving: £5674

Would I lose more than this by cashing in early assuming no market crash or stick it out and hope there is no crash - Never again!!

Many thanks for any advice offered.

vectistim

Is it a unit linked or with profits policy?

dunstonh

Is there an MEP (mortgage endowment promise)?

You havent given us the cost of surrender. What is the surrender value vs the current position?

daddypuff

vectistim wrote: »

Is it a unit linked or with profits policy?

Hi

It's a with profits policy

McKneff

You also have to bear in mind that you have life cover.....


And there also could well be a terminal bonus....

daddypuff

dunstonh wrote: »

Is there an MEP (mortgage endowment promise)?

You havent given us the cost of surrender. What is the surrender value vs the current position?

Can't see any mention of MEP on documents or in the booklet.

Regarding surrender values I have asked for these today and will get these within a few days.

daddypuff

McKneff wrote: »

You also have to bear in mind that you have life cover.....


And there also could well be a terminal bonus....

That's correct, but the life cover is there to payout through death to cover the mortgage. Well if the mortgage is paid we don't need the cover for that eventuality and this will finish in Dec 2015 anyway.

In regard to terminal bonus They tell me that I would get a pro-rata payment of it if cashed in early. No doubt in their favour.

dunstonh

Can't see any mention of MEP on documents or in the booklet.

There rarely is. Providers tend to keep quiet about it. Pearl, Standard Life and Aviva are the main ones that have MEPs.

In regard to terminal bonus They tell me that I would get a pro-rata payment of it if cashed in early. No doubt in their favour.

It would be whatever it has accrued to date. No more. no less. However, the surrender charge will take care of reductions. Plus a potential MVR and if it is a conventional with profits plan then there will be a reduction in the basic sum assured.

daddypuff

dunstonh wrote: »

There rarely is. Providers tend to keep quiet about it. Pearl, Standard Life and Aviva are the main ones that have MEPs.



It would be whatever it has accrued to date. No more. no less. However, the surrender charge will take care of reductions. Plus a potential MVR and if it is a conventional with profits plan then there will be a reduction in the basic sum assured.

I'm with Guardian

Are you saying I won't know until they write to me with the surrender values?