Value of Endowment plummets

barryd999

I have an endowment with Legal and general which matures in October.   Its not a huge one but was originally set to make £44k.  Before the Coronavirus the value was £39K.  I just noticed yesterday last months statement showed a value of £28k!  Thankfully they sent one this month where it had risen to £32k.  Mortgage is long since paid off thankfully but its still a bit of a worry.  Whats the best advice? Sit tight and hope it recovers or cash it in? My gut feeling is to just leave it.

eskbanker

There are many different opinions expressed in threads on here and elsewhere about the next direction of markets, so take your pick!  One factor that may affect your decision is terminal bonuses (or early redemption charges/adjustments) so it may not be as simple as seeing what's happening in the broader financial markets....

DiggerUK

Try my red flag, green flag meter. 

If you think there will be more red flags flying in October check out what it will cost you to exit now. If you think there will be more green flags flying in October sit tight.

My take on the economic situation is that it is more than severe, worse than GFC1 in 2007/8. Then there will be the clean up operation and how long that will take. But that is my opinion..._

barryd999

eskbanker said:

There are many different opinions expressed in threads on here and elsewhere about the next direction of markets, so take your pick!  One factor that may affect your decision is terminal bonuses (or early redemption charges/adjustments) so it may not be as simple as seeing what's happening in the broader financial markets....

Thanks. Probably worth a call to L&G then to find out what bonus I could potentially miss out on and any charges for early redemption.  I know very little about these things but I presume the big hit was due to being caught out by the sudden impact of the virus on the markets and the £4k recovery was a reaction by the investors to that hit.  Perhaps it will grow back in the coming months up to October.  I just dont want a statement to land on my doorstep saying its worth 76p.

Old_Lifer

As  Eskbanker says,   we have had several similar questions over the past monthj or so.    If you go back  you will find a range of opinions  from Forum members.

You will find a query from a few days ago   if you click on my username,  then click on replies  and  scroll down several posts  and you will find a thread   'Pru Endowment'  which may be of interest to you.

Albermarle

I just dont want a statement to land on my doorstep saying its worth 76p.

This is not going to happen .

Normally the advice in these situations is to sit tight , but that is more when the time scale is longer eg a few years before you need the money . As this is a shorter time scale it is a bit more 50:50. 

barryd999

Old_Lifer said:

As  Eskbanker says,   we have had several similar questions over the past monthj or so.    If you go back  you will find a range of opinions  from Forum members.

You will find a query from a few days ago   if you click on my username,  then click on replies  and  scroll down several posts  and you will find a thread   'Pru Endowment'  which may be of interest to you.

Thanks. I found that and had a read. I need to do some homework I guess and find out more about what kind of policy I have.

barryd999

DiggerUK said:

Try my red flag, green flag meter. 

If you think there will be more red flags flying in October check out what it will cost you to exit now. If you think there will be more green flags flying in October sit tight.

My take on the economic situation is that it is more than severe, worse than GFC1 in 2007/8. Then there will be the clean up operation and how long that will take. But that is my opinion..._

Thanks, Not sure what you mean by try my red flag, green flag meter.  Can you clarify please?

Notepad_Phil

barryd999 said:

I have an endowment with Legal and general which matures in October.   Its not a huge one but was originally set to make £44k.  Before the Coronavirus the value was £39K.  I just noticed yesterday last months statement showed a value of £28k!  Thankfully they sent one this month where it had risen to £32k.  Mortgage is long since paid off thankfully but its still a bit of a worry.  Whats the best advice? Sit tight and hope it recovers or cash it in? My gut feeling is to just leave it.

It really depends on what plans you had for this money. If you hadn't really thought about it, then maybe think about it now.

If it turns out that you will need the final total to be close to its current value then given the nearness to October you'd probably be best to look to see what you can do now.

However if there are no real plans, or you can afford it if it does fall in value again, then your gut is probably right and just hold on.

DiggerUK

barryd999 said:

DiggerUK said:

Try my red flag, green flag meter. 

If you think there will be more red flags flying in October check out what it will cost you to exit now. If you think there will be more green flags flying in October sit tight.

My take on the economic situation is that it is more than severe, worse than GFC1 in 2007/8. Then there will be the clean up operation and how long that will take. But that is my opinion..._

Thanks, Not sure what you mean by try my red flag, green flag meter.  Can you clarify please?

It's not complex you just look at all the economic indices. This list is not exhaustive or exclusive.

Business markets, firms going bust or in financial measures, unemployed and people not earning, savings and investments. If it looks fine it's a green flag, if it looks bad it's a red flag. Then count up the flags.

Only you can make the decision to hold or fold and it is only you who will have to live with your decision..._

barryd999

Notepad_Phil said:

barryd999 said:

I have an endowment with Legal and general which matures in October.   Its not a huge one but was originally set to make £44k.  Before the Coronavirus the value was £39K.  I just noticed yesterday last months statement showed a value of £28k!  Thankfully they sent one this month where it had risen to £32k.  Mortgage is long since paid off thankfully but its still a bit of a worry.  Whats the best advice? Sit tight and hope it recovers or cash it in? My gut feeling is to just leave it.

It really depends on what plans you had for this money. If you hadn't really thought about it, then maybe think about it now.

If it turns out that you will need the final total to be close to its current value then given the nearness to October you'd probably be best to look to see what you can do now.

However if there are no real plans, or you can afford it if it does fall in value again, then your gut is probably right and just hold on.

well its just savings really now and would be just added to the pot. Im 54, semi retired some time ago but mainly down to becoming quite severely disabled with Arthritis.  Wife does not work so we whilst we are ok financially we only have a very basic income and a pot of money that will have to see us out until we get whatever (if any) state pension there might be and / or we both peg it.  
Ive just got my hands on all the statements so will have a look through and see if I Can find any further info as to what kind of endowment / fund it is.  Its just one of these things we signed up for nearly 20 years ago and never really took much interest in, until now,