Standard Life Final Bonus Question

mleonard79

EdInvestor wrote: »

Perhaps you could give a policy value figure for August 2005?

I don't know the exact figure for 05 but I know that 05 to 06 wasn't very good. For the first 6 months of 06 the policy was only growing on average between £25-40 p/m and the fact that this was quite a bit under what I could save by paying it into the mortgage was the reason I'd pretty much decided to sell it last year. I decided to hold on, however, due to the demutulisation and the fact there might be better bonuses coming. I decided at that time to hang onto it until Feb 07 and if the bonuses or better growth hadn't materialised by then to sell it but the bonus payment in Aug 06 was good and the one in Feb 07 even better so I decided that it was the right decision to hold on. I've been keeping a careful eye on it though and the plan still is if it starts to underperform and go below what I could get by paying it into the mortgage again to consider selling it.

EdInvestor wrote: »

The problem with extrapolating on 2006 and 2007 figures is that there was a one off boost to the TB last year using money raised at the demutualisation, and they have repeated this one-off approach to a lesser extent this year.

This means they are leaving nothing in the kitty for smoothing in the case of bad years - they would rather have to take this extra money away.The rises also don't reflect real underlying investment returns as would be the case in a proper unit trust and thus you can;t rely oin similar returns in the future.

Thanks for the information. I undestand what you're saying and I'll keep a careful eye on the next bonus payments and will sell it if the returns are consistently poor as that's always been the plan. To be honest I'm very surprised that it's averaged a growth of £110 p/m when it was only growing by £25-40 at the start of last year so even if it goes back down quite a bit again so long as it stays above £55 p/m I feel it's worth holding onto when you take the life insurance part of the policy and the possible endowment promise payment into account.

Regards

Michelle

mleonard79

JoeK wrote: »

You are astute!

Thanks :beer: I'm no expert but I'm trying my best.

JoeK wrote: »

Beware that you might be told to surrender or sell the policy without taking into consideration all the options that are available.

See a competent Independent Financial Adviser (IFA) who is the only person that is allowed to give advice on an endowment policy.

JoeK

Don't worry - I'm not easily talked into anything when it comes to finances (more likely to go over and over things til I'm blue in the face )

I don't think there's any need to see an IFA for the moment as I've made the decision to stick with the endowment while it's growing at this level but as I've said to EdInvestor if it starts performing poorly again I would go back to considering selling it and I think at that time seeing an IFA to check on options would be a good idea.

Regards

Michelle