Hold or sell

Misstique

I have an endowment which I don't need to repay my mortgage which was originally with Scottish Amicable.

I've just received my annual statement and wonder if the financial whizzkids or this board would advise sell or keep.

Details:

Home purchaser plan
Maturity date 2018
Basic units at 06 10076
Previous bonus units 2431
New bonus units 200.571
Total with profits value £12708

Is this a good performer or not, I have no idea.

Misstique

Any ideas please (serious ones that is)!

EdInvestor

Please post some more info

Surrender value
Monthly payment
Maturity forecasts

Interest rate on mortgage

Misstique

Hi Ed I posted a response awhile ago which seems to have gone awol!


Here is the info again:

Interest rate is 6.5% (i don't need the endowment to repay the mortage).

Surrender value £18853
Montly payment £70.30
Maturity forecasts

to 2018@ 4% £38400
6% £45900
£549000

Document then says assuming a further 10 years 7 months premiums will be paid

Possible paid up maturity benefit 27,7000, £33900, £41400 @ 4,6, and 8% resectively.

this is a unitised with profits endowment (10 with profits clusters). Originally a scottish amicable policy.

All this is as clear as mud to me!!!

Thanks all for your thoughts.

Misstique

Any thoughts anyone?

EdInvestor

2018@ 4% £38400
6% £45900
£54900

if you surrendered this one and used the lump sum to reduce the mortgage amount, also increasing the mortage payment with the endowment premiums so as to overpay @ 6.5%, your total return at maturity would be 51,052.

This would be higher than the return @6% which the endowmrnt should produce, but of course you are getting free life cover.

Not a bad endowment.Why not see if you can get a quote to sell it, that will give you an idea of whether it's worth keeping as well.

https://www.apmm.org

dunstonh

dont forget the terminal bonus. That may not be included in the projections. Some unitised WP plans do, some dont.

What is the current value? You mention surrender but you need to see wha the cost of surrender is going to be. Any alternative has to make up that loss before it sees any profit.

Misstique

Hi guys, thanks for your responses.

I tried to sell before but was told that as it was a unitised policy the company was not interested. At this point I went through the misselling thing because I thought I had bought a with profits policy not a unitised with profits policy. Although my complaint was upheld, I did not receive a payout because I had already started to reduce my mortgage by overpayments.

I do not need the endowment to pay for my mortgage (almost mortgage free ). I was thinking of just keeping it as a savings/pension vehicle but wanted to know if it was a good performer.

Regarding current values, the information above was all that was supplied when I asked for current values. Is there another way to find out this information?

Cheers.