Cashing in Endowment one year early - Tax Liability

max5445

My endowment policy is due to mature next November (22 years), the targeted figure is 24,000. The Policy was purchased for my first property which I paid off by other means, however I continued with the endowment. I called the policy provider who informed me that should I cash the policy in now, I would receive 23,500. I am currently in the high tax bracket with my salary, am I liable to pay more tax on this payout. Many thanks

TadleyBaggie

Is there not a terminal bonus payable, if so cashing in now could be very costly. There should be no tax payable regardless, I had two endowment mature and didn't have to pay any tax.

McKneff

There will be a terminal bonus added to your amount and also think on that you have a full year of
life insurance built into the Policy.

If you cash it in you may have to fund life insurance out of your own pocket if you need the protection

I suggest you just leave it alone

McKneff

You dont pay tax on the payout anyway, you would only pay tax on the interest it earned after you banked it.

Dont spend it all in one shop lol