Endowment v Mortgage Repayment Plan

Jenga12

I thought I had an endowment as I have an interest only mortgage from the 1990s and that a Mortgage Repayment Plan (which is what I have, turns out) was the same as an endowment plan but they say it isn't. What's the difference? I've got units in 3 funds - foundation, balanced (can't remember the 3rd name) and I'm meant to be investing in things like 'UK Equity'. What's UK Equity? Should the Plan provider be able to tell me the names of each individual company that's within this 'UK Equity'? Does UK Equity follow ftse? Apologies in advance if the questions are a bit simplistic in the eyes of business minded forum members.

MWT

If I've understood what you've got there one of the key differences is that while an endowment plan might have had a minimum guaranteed payout aimed at covering the mortgage balance at term, the investment plan you have does not carry any guarantee and you are responsible for monitoring the performance and ensuring the final value will be sufficient to cover the mortgage payment required at term.

The funds you are invested in will have names like 'UK Equity' which give you a guide to the parameters the investment managers are using for that fund.

So a 'UK Equity' fund would usually have the majority of the money invested in UK quoted companies.

Exactly which companies would vary as the managers make decisions on what to buy or sell, and it should matter less to you which companies are in the fund vs how the fund performs over time.

Right now though I'd be paying attention to what the plan is worth compared to the outstanding amount of the mortgage and how long it is before the mortgage ends...

Old_Lifer

In the 1990's it was common for a whole life policy to be used as a mortgage repayment vehicle,   usually by tied agents who could not offer an endowment.

You really need to  read the documentation issued at the start to establish what type of repayment vehicle you have.

dunstonh

I thought I had an endowment as I have an interest only mortgage from the 1990s and that a Mortgage Repayment Plan (which is what I have, turns out) was the same as an endowment plan but they say it isn't. What's the difference?

An endowment policy is a specific type of plan.   So, you would either have one or you wouldn't.   The alternative plan would appear to be something else.  So, it won't be an endowment but it may (or may not) still be suitable for mortgage repayment.

Should the Plan provider be able to tell me the names of each individual company that's within this 'UK Equity'? 

UK equity is the UK stockmarket.  So, thousands of companies potentially. 

Does UK Equity follow ftse?

Only if its the UK equity index tracker.   Otherwise it will invest in UK equities at different ratios to whichever FTSE index you are referring to.  If you mean the FTSE100 then you would hope not as that is a dire index to follow.  Consistently underperformed for the last 25 years and no expectation that it is going to change.

The underlying assets are not important to you at this point.   It wouldn't help you in any way that you can make sense of.