Endowment reached value early! Cash in or keep it going?

Rachfromcambridge

I have a £37k Countrywide assured endowment policy for the interest only part of my mortgage which has reached its value two years early. I have been given the option to cash it in and pay off the mortgage or keep it going and build up a surplus. If I cash it in I will save £139 per month for the policy and £38 per month of interest on the mortgage (I have 7267 units) It has been transferred to a safer deposit fund until I decide! Any advice?

TrickyDicky101

Will the all the funds be reinvested into the provider's managed fund (or whatever it was invested in until switched to the deposit fund) should you decide to continue? If so, you will be taking the risk that markets crash and hence you may not get back sufficient to pay off your mortgage at the full maturity.

Would you be prepared to accept this risk?

StuC75

If the market crashes then so does your mortgage plans (granted there would also be other issues that would raise)..

why not cash in to pay off the mortgage now, then setup another investment to then pay in the money that you would have paid going forward.

Granted any rises in the coming years wouldn't give you the same level of increase, but you would also be shielded from the losses..

kingstreet

If I kept it, I'd leave the capital in the deposit fund and direct the new contributions to something equity-based with the chance of increased growth prospects. Then you only risk what you put in from now, not your accrued capital.

Encash it if you can do something more rewarding with the £180 a month you'll save, such as repaying more expensive debt faster.

Rachfromcambridge

Thanks for the advice, I decided to cash it in :-)