Standard Life Homeplan endowment - end-date in 3.5 years - what are our best options ?

motorhead_2

We have a Standard Life Homeplan endowment, which we took out to pay an interest-only mortgage, and the current state of play is  :

• With Profits Value: £37K
• Final Bonus: £7K
• Current Surrender Value: £44K

The plan's end-date is 3.5 years away.

When we last got advice we were told it was still "okay" investment as the built in £65K life cover was a good thing.
It will not likely give us the £65K projected target - but if grows at "mid-rates" it should give £52K (and we've have put things in place to make up the shortfall). 
I guess the £65K life cover  for my partner or I is not as big deal now now as it was as Standard Life would only be helping make up the difference between the current Surrender Value and the £65K projected target i.e. £21K .

I wonder if we should

• Surrender it now and put it towards our mortgage (as we have no early repayment fees)
• Surrender it now and invest elsewhere
• keep going with it as it
• keep going with it but change funds - it  is 60% Standard Life Managed Life Fund and 40% Life With Profits Fund.
• something else completely 

Any advice gratefully appreciated!
MH


 

dunstonh

• With Profits Value: £37K

• Final Bonus: £7K

• Current Surrender Value: £44K

You havent mentioned the MEP - mortgage endowment promise.  Most SL plans have this. It would have been provided to you many years ago but you may have forgotten and I dont believe SL go out of their way to tell people unless they ask.  So, you may need to ring SL and ask if there is an MEP on your endowment.  If so, what it may be.   They can be a bit fussy about telling you this info.    If you have an IFA and the plan is on the IFA agency (which can be arranged if it is not) then they do supply the info to the IFA.

It will not likely give us the £65K projected target - but if grows at "mid-rates" it should give £52K (and we've have put things in place to make up the shortfall). 

The lower and mid projection rates have a modern history of under projecting the likely outcome (unlike the days when they used much higher figures on projections).

• Surrender it now and put it towards our mortgage (as we have no early repayment fees)

• Surrender it now and invest elsewhere

You will lose the MEP on either of those options.

motorhead_2

@dunstonh
Yes - I looked up my annual statement and yes it mentions a MEP. It is a vague as can be - see below. But thanks for mentioning it as I will bear this in mind before doing anything. Quoting ...

It is not possible to determine what, if any, amount might be payable in respect of your plan under the MEP until your plan has matured. We currently estimate that there may be a MEP payment when your plan matures of between £2,251.00 and £3,377.00.  ... You should not rely upon it in making any decision about your financial affairs. For these reasons the illustrations shown in your statement do not allow for any MEP payment. ... The MEP payment may be higher than £3,377.00 or lower than £2,251.00; it could be nil.