Endowment - very chessed off !

nknowlton

I orgiginally took an endowment out with Abbey in 1994 for 70,000 and over the last few years have recieved the letters that indicated it would not achieve that - fair enough ( sort of). They gave me projection figures of 4% 6% and 8%.
This policy has now been sold ( by Abbey) to a company called Phoenix?? and last week I recieved their letter, which now has projection figs of 2.75% 3.25% and 3.75% - this is a massive change and when I queried it they said it was a more realistic projection !! I also made the point that my 3 year old daughter could get a better rate of return by putting the money in her Building Society - all this was agreed by their Helpline !!!! so not much help, Iam in the process of complaining.
My question is what would anyone advise ?? make it paid up ? surrender it ? leave it alone ? the policy is split between Index linked and with profits.
Also does anyone know if projection figs take into account terminal bonus cause surely this would make quite a bit of difference ?
many thanks

dunstonh

I also made the point that my 3 year old daughter could get a better rate of return by putting the money in her Building Society

The projections are just examples. Not guarantees. The difference in the projection rates isnt going to change the rate of return received. Phoenix project using lower rates than Abbey. Would you prefer they used higher projection rates?

so not much help, Iam in the process of complaining.

Complaining about what? the fact that they use lower projections than higher ones? that will be a waste of everyone's time. They should be commended for using a rate more realistic to the asset class of the investments being used.

the policy is split between Index linked and with profits.

If it has index linked funds in there then no wonder they are using a lower projection rate. Index linked is good for part of it if you rebalance periodically but for a long term regular investment it isnt ideal.

Also does anyone know if projection figs take into account terminal bonus cause surely this would make quite a bit of difference ?

I would totally ignore final bonus on phoenix plans. There may well end up being one but they are low potential.

A better option is to look at the avaiable funds and pick a more suitable spread.

EdInvestor

What interest rate are you paying on your mortgage?

Also post some info:

Surrender value
Monthly premium
Maturity date
Maturity projections

and we can make some suggestions.

nknowlton

I see your point about complaining but surely I am paying these people to manage my money and the best they can achieve is 3.75 % - can't be right surely ??

surrender value - i will find out
monthly premium 140.44
maturity date Aug 1 2014
maturity projections
2.75% = 41,500
3.25% = 42,700
3.75% = 44,000

thankyou both for your comments and efforts