should i surrender endowments? Mortgageman

PaulGeary

Did I hear on the BBC today that Standard Life are no longer saying they will make up a sum of money on endowments which previously they said they would do?

payless

Just heard same on news-
no doubt one of those "get out " clauses I mentioned

dunstonh

Yep, just heard it too. I wonder if its the earlier plans with the higher target growth rates and highest annual bonuses that were added initially that will be the hardest hit.

PaulGeary

If the past 2 years have been a struggle for Standard Life I am now seriously thinking about surrendering my endowment policy which matures in 2011. Who is to say the next few years are not going to be difficult?

I could just about pay off my mortgage with the surrender plus a bit of cash.

Alright I will be losing my entitlement to a windfall??????
I would be losing some life cover...we have no children !!. I would be losing future bonuses?????

My advisor said a couple of weeks ago to hang on in there, but after yesterday, I am not sure.

I may provisionaly ask SL and a couple of brokers for a SV and then see.

dunstonh

Alright I will be losing my entitlement to a windfall
I would be losing some life cover...we have no children !!. I would be losing future bonuses??

you would also be losing the guaranteed minimum sum assured and probably a chunk of existing bonuses.

Personally, I think you are over reacting and should wait until demutualisation before you consider surrender. Surrender penalties also reduce every year you leave it.

PaulGeary

DD
It is hard not to over-react in the light of SL keep moving the goalposts,

SL Mortgage endowment Promise! Promise, Thats a laugh!

My minimum amount SL will pay at maturity is 19599.05(12K shortfall), will a Terminal bonus be added to the 19599 at maturity?
TIA

dunstonh

DD
It is hard not to over-react in the light of SL keep moving the goalposts,

SL Mortgage endowment Promise! Promise, Thats a laugh!

My minimum amount SL will pay at maturity is 19599.05(12K shortfall), will a Terminal bonus be added to the 19599 at maturity?
TIA

You dont know what Standard Life are going to pay out. The forecast just takes a "current value" and adds 4,6 or 8% in. That part of the projection is clear. However, it is the base value that they project from that is unclear. SOME do not include current terminal bonuses accrued, SOME are not current values but the lower surrender value. The easiest way to check is ask for your surrender value and compare that against the "current value" they used on the projection. If it is the same, chances are that they are undervaluing the plan.

PaulGeary

I have been on the SL web site and the current value of my policy is £12732.

With a 4% gain, maturity in 2011 would be 19599 which is the guaranteed maturity value as this is higher than 4% would accrue.

My monthly payments are £74, with 77 payments due= to 5700.
I think my case has arguments for both sides and the terminal bonus, or an increased SV from a Broker could make me decide whether to 'stick or twist'.

FWIW I am not earning a big wage at the moment and if I were able to 'clear the decks' it would save me about
£180pm which would be useful.

dunstonh

I have been on the SL web site and the current value of my policy is £12732.

What was the surrender value?

PaulGeary

DD
I will have to phone SL on Monday for the SV, the web site only gives current value and a 'projected' maturity value.
Rgds