Endowment loss

snitter69

Hello all

Bit of a dilemma here.  Not really sure what to do (& not sure if anyone will, as I suppose it means predictions!)

I have a mortgage for £40k left (remortgaged a couple of times over the years).  Half is repayment, and the other half is endowment.  The endowment is supposed to reach £21.5k by the end of 25 years (5 years to go).  The endowment has been "green" all the way through, until my last statement.  Last September, it was worth £17050.  After paying in £600 over the last year, it's now worth £16990 ( so I've lost £660 over the year including the premiums paid in).  I assume this is due to Covid and the economy.  Mortgage rate is silly, so it would be daft to remortgage (1% above the base rate - no lower limit)

There's no penalty for cashing in the endowment early.  I can take the full £16990 now.  Should I wait & see if it perks up, or take the money, pay off a good wedge of the endowment half?  I know it's not a massive amount, but I don't want to be paying £600 a year into it & losing money.  Endowment is with Countrywide Assured, mortgage is with Santander.  Maybe I should wait 6 months & ask for a statement to see if it's perked-up perhaps?

Any advice gratefully accepted

Thanks

Mark

dunstonh

After paying in £600 over the last year, it's now worth £16990 ( so I've lost £660 over the year including the premiums paid in).  I assume this is due to Covid and the economy.  Mortgage rate is silly, so it would be daft to remortgage (1% above the base rate - no lower limit)

The markets fell between Feb and March 2020 due to Covid but all except UK equity have recovered since then.   If you have a decent diversified spread then you should be back in profit over the last 9 months.   However, if you are overly heavy in UK equity then you would likely still be under.

What is the date of the value.  Often with statements, they are a month or two behind issue.   We saw that in July when statement valuation points were April, not long after the low point.

 I know it's not a massive amount, but I don't want to be paying £600 a year into it & losing money. 

What did you do in 2018 when markets fell?  Or 2015/2016 when there was a market crash?  Or 2008/9 with the credit crunch?  Some of those were larger drops than the one earlier in the year.

Predicting the future is impossible.  However, making sure your investments are still suitable and working to modern methods is important with any investment product.   20 years ago, some of the investment selections were awful.  100% into UK equity for example is dire but you do see it on older products.   

snitter69

The statement date is 12/09/20. The funds code is FUNDA. no idea if that helps. Many thanks for your reply

Old_Lifer

I assume this is unit-linked  in which case as it is mortgage related, it is probably  a managed fund.   If so, why not wait for markets to improve  before  considering the future of the policy.   You do have five years to maturity.