Endowment Performance Compliant

sxd901

My endowment matures this year. It has performed woefully, as expected. However, last year I received a statement with a prediction of maturity value at 3 interest rates the lowest being 0.5%.

Recently I have received an update which shows a maturity value of £5k less than the 0.5% projection. Surely if funds were in a cash savings they would have returned the 0.5% as specified and as a maturing endowment should the fund be transferred to defensive stock.

Can I complain about the return or has the last year been so bad that 0.5% was totally unrealistic?

Any advice welcome. Thanks,

sxd

dunstonh

It has performed woefully, as expected.

Has it actually performed woefully or has it performed reasonably but had a high target growth rate?

For example, An endowment returning 6% a year average with a 12% target would have a large shortfall. Yet a 5% return average with a 4% target would achieve a surplus. However, the one with the shortfall is the better performer.

However, last year I received a statement with a prediction of maturity value at 3 interest rates the lowest being 0.5%.

Providers do not issue predictions. They issue projections using synthetic figures. Those figures are often unrealistic. Usually understating nowadays.

Surely if funds were in a cash savings they would have returned the 0.5% as specified and as a maturing endowment should the fund be transferred to defensive stock.

Providers are not allowed to change funds without your permission or instruction. So, if you want to move it into a defensive fund, then you are free to do so.

Can I complain about the return or has the last year been so bad that 0.5% was totally unrealistic?

Stockmarkets are around 16% down. So, 12 month returns on medium risk are about 5% down on last year. So, your figure indicates better than average.

No, you cannot complain about investment returns as investment returns are always an unknown. You have to average out the good years, bad years and nothing years.

sxd901

Thanks, appreciate the informative response.