Endowment - cash in or carry on?

Nick_A_3

I need some advice about an endowment policy and whether to carry on with it or cash it in.

I took out an endowment mortgage in 1999. When it became obvious that the endowment was not going to reach the target amount required at maturity, I switched my mortgage to a repayment mortgage in 2004. At the time, I was advised by the new mortgage provider to carry on with the endowment, so I have been keeping up my payments into this fund.

My dilemma is this: I am coming off a fixed rate on my current repayment mortgage in March and so expect my monthly payments to go up. Do I cash in my endowment and use the cash that is released (approx. £6000) to pay off my credit card debit and reduce my monthly outgoings, so helping with the expected increase in mortgage payments? Or is it better to carry on with the endowment, which is not due to mature until 2024? If I do the former, it will certainly help in the short term; if I carry on with the endowment I can meet the rise in mortgage payments but it will hurt.

dunstonh

I took out an endowment mortgage in 1999. When it became obvious that the endowment was not going to reach the target amount required at maturity, I switched my mortgage to a repayment mortgage in 2004. At the time, I was advised by the new mortgage provider to carry on with the endowment, so I have been keeping up my payments into this fund.

It was totally impossible to make any judgement of hitting target or not in 2004 for endowment started in 1999. Even an endowment on track for a big surplus would show a shortfall on the projections after that short a timescale.

You are asking us to make a judgement on your endowment but you havent told us anything about it apart from the start year and the term of 25 years. We need to know about the investment if you want us to pass judgement on the investment.

Nick_A_3

The target amount was £54,152. As of 30 May 2007 the plan value was £6022.04. I pay £92.16 per month into the policy; £97 per month is invested.

Not sure what else you might need to know to offer any advice, but your help is appreciated.

dunstonh

not sure what else you might need to know

Who is it with?
is it unit linked or with profits?
if unit linked, what investment funds are you in?
if with profits, what is the bonus paid to date and what is the final bonus accrued to date?
what is the current value and what is the surrender value (you mention value but we need to know both)?
What would be the cost of replacement life cover?
What are the projections and projection rates used?

There are other questions but they will depend on how you answer those

Nick_A_3

Who is it with? Scottish Life

is it unit linked or with profits? With profits

if unit linked, what investment funds are you in?

if with profits, what is the bonus paid to date and what is the final bonus accrued to date? declared bonus £23.28; from statement - rate of bonus for Basic units 2005 0.5%, with respect to with profits 1 & 2, and Bonus Units 0.5%; rate of bonus for basic units in 2005 with respect to with profits benefits 2% and Bonus units 2% (not sure if this answers the question but I don't see anything else on my statement about bonuses)

what is the current value and what is the surrender value (you mention value but we need to know both)? Current value £6022.04; would need to enquire about surrender value

What would be the cost of replacement life cover? £26.44

What are the projections and projection rates used? At latest review (28/06/06) 3.5% projected £34800; 4.5% projected £39800; 7.5% projected £59900