Help - Legal & General Endowment

MoneyMac

I would be interested in any opinions from anyone who has any knowledge of Legal and General endowment performances. We have 2 endowments with them one maturing Sept 2011 and one Mar 2012. Just had statement with following info on:-

Endowment 1 (to cover £28,750)
Sum Assured £10,580
Bonuses to Date £8946.60
Current Terminal Bonus Rate 94%
Projections 4% £30,300 6% £32,700 8% 35,300

Endowment 2 (t0 cover £14,250)
Sum Assured £4,632
Bonuses to Date £3213.80
Current Terminal Bonus Rate 101%
Projections 4% £12,200 6% £13,600 8% £15,200

When i rang to ask about projections and whether they include terminal bonuses i was given a vague answer of 'only a proportion' but they couldn't say how much. As there is only 4 and 5 years left to run should we hang on or get a surrender value and see if it is worth paying it against the mortgage now. Does anyone know much about Legal and Generals performances.

Any info much appreciated.

MoneyMac

Hi

Please has anyone got any feedback for me?

Also how do you think i should interpret the projections, are they usually pretty close and also do i take the current terminal bonus rate as the one i will get in 4-5 years time on maturity? Terminal bonus rate of what?

Many thanks

EdInvestor

Please post the surrender values and the interest rate on the mortgage.

MoneyMac

Hi

I have surrender values as at 19th June 07 (the last time i phoned them)

They are:- Endowment 1 - £23899.60

MoneyMac

Sorry i think i pressed the wrong key on the last post

Hi

I have surrender values as at 19th June 07 (the last time i phoned them)

They are:- Endowment 1 - £23899.60 Endowment 2 - £9230.40

The interest rate on the mortgage is 4.79% till May 2011.

Hope this is ok

EdInvestor

I think you'd better update the S/Vs, markets have been quite volatile recently.

MoneyMac

Hi

I've just phoned today to find out the current surrender values and they are:-

Endowment 1 - £24155.20
Endowment 2 - £9376.50

I also asked if the projections they gave me included any terminal bonus and they said only an elemnt (whatever that means) and that terminal bonues are not guaranteed. So how do i interpret the projection figures?

EdInvestor

Sorry, also need to know your monthly endowment premiums.

MoneyMac

Hi

Monthly endowment premiums are:-

Endowment 1 - £47.60
Endowment 2 - £23.20

Hope this helps

EdInvestor

MoneyMac wrote: »

Projections 4% £30,300 6% £32,700 8% 35,300

If you surrendered this one and reduced the mortgage loan also upping the monthly payment by the amount of the endowment premium to maturity your return would be 31,677.The L&G fund will probably make 6% so you might get a bit more if you keep the endowment, which also provides free life cover. But it's not much of a premium for taking the risk.

Endowment 2 Projections 4% £12,200 6% £13,600 8% £15,200

Similar calculation for this one provided a return of 13,411.

I would be inclined to seek quotes for both of these endowments from https://www.apmm.org to see if you can get more for them. If not, endowment number 2 doesn't look like it's worth keeping, endowment number one is a only a little bit better .

MoneyMac

As we are on a fixed rate with a redemption penalty till 2011 if say we surrendered them or sold them would it pay us to put the money into a savings account and do the £500 overpayment each month that we are allowed without penalty till the money has been used against the mortgage, obviously this will be gaining interest as well?