Prudential With Profits Policy

Murphy_The_Cat

I got a letter from the nice (?) people at the Prudential, telling me that they had done realy well in 2006 and that the WP had prduced a return of 11.8% before taxes/charges, and that 0.6 Billion £'s was going into the 'pot'.

It also mentioned that if you had a home purchaser plan, many customers who would have previously 'missed' will now 'hit' their repayment target.


Couls anyone tell me how Prudential W-Ps have performed compared to other Endowment providers in this respect, and also, in simplespeak (;)), what the letter is REALLY telling me.

Thanks.

dunstonh

Pru and NU are the top two with profit fund providers out of the main insurers. No Pru endowments have failed to hit target yet and the average surplus last year was £3300 (up from £2200 the year before).

Whilst no guarantees are offered, if you have a Pru plan, then you should be sitting pretty comfortable in the expectation that your plan will pay a surplus. Even Scot Amicable plan (now owned by Pru) have a 95% success rate and thats improving.

Projections on with profits plans are never a good guide as they often do not include any terminal bonus on the plan. As this is where the bulk of the return is likely to be, if you dont include it, then the projections are understating the likely return of the plan. Of course, that only really applies to the good providers like Pru where a terminal bonus exists and is likely to grow over the long term.

EdInvestor

Murphy_The_Cat wrote: »

...the WP had prduced a return of 11.8% before taxes/charges

Taxes are 20% of gains, and charges on old-fashioned endowmewnts are in the 2-3% range.

It also mentioned that if you had a home purchaser plan, many customers who would have previously 'missed' will now 'hit' their repayment target.

More endowments will now pay off the mortgage.[Forget about the extra for the cruise....:rolleyes: ]

Couls anyone tell me how Prudential W-Ps have performed compared to other Endowment providers

Better than alsmost all the others, but it's not saying much, most of the others performed abysmally.Expect a 6% annual return from a Pru policy.Not a lot better than cash these days .:(

Murphy_The_Cat

EdInvestor/Dunstonh

Thank you both for coming back so quickly, with your thoughts and advice.

hmmmm, things are looking up.

I took out my 25 year Scot Am Endowmnent (later Prudential) in 1992 which is a 50/50 split between managed & with profits. For the last few years, we've had the 'red letters' telling us that it has a strong likelihood to miss the target (by quite a bit) at a growth rate of 6%, so being the cautious chap,that I am, I've gone part repayment on my mortgage, plus, I'm overpaying on a monthly basis as well. With the news that you've both given me, it looks like the miss (if theres going to be one) won't be so bad after all.
Belts and braces.


My other Endowment Policy, that I took out on 1998 with Scottish Life is rocking and rolling along :j