Standard Life endowment promise - worth owt?

sleepless_saver

I have a Standard Life with profits endowment started in 1992, current value £16358 including £940 final bonus. Low rate projection is 29k on maturity, high is 43k. This is sad as I need 69k!

I am saving in ISAs etc and would like to pay off the mortgage in 5 years time when I'd like to take early retirement. I would do this from savings, retirement lump sum, and selling the endowment after DM. This is 7 years before the policy matures. My monthly payments are £104.

SL say in the yearly statement that they will make a payment under their Mortgage Endowment Promise of £5520 to £8280 when the policy ends. Is it worth my while holding out for this and continuing to pay the premiums post retirement? I probably wouldn't be able to afford to pay off the whole mortgage on retirement if I did that as I wouldn't be selling the policy.

Are SL likely to even honour this promise (I am a bit cynical these days)?

carnet

Standard Life reneged on this promise in Oct 2004.

Of the £393M it had set aside up to that date, it stated that this would be used as "top-ups" to eligible policies.

Those policies which matured between Oct 04 and 31.12.05 would receive "maximum top-ups".

Presumably eligible policies maturing after 31.12.05 will get an ever decreasing top-up the longer they have to run to maturity.

sleepless_saver

Yes, I'd thought they'd reneged too, but it's mentioned in the statement I got in March.

EdInvestor

IMHO this is genuine and you will receive the money, though I'd only count on the lower figure and regard the rest as a potential bonus. I would suggest you should review what to do with the policy after DM.

In the meantime you may do better to pay money into the mortgage to reduce it (thus paying less interest) rather than put it into an ISA.Have you remortgaged to a better deal?

sleepless_saver

I'm three years into a 5 year fix at 5.19%, and my savings at the moment amount to an emergency reserve (3/4 months pay) rather than cash I could afford to tie up by paying off the mortgage. But I'm working hard at increasing the savings - just hope the stoozing can continue!

The mortgage will become flexible in two years time at the end of the fix and in any case has no ties past then so I'll review then.