Aviva Life Deferred Distribution AL1 Life Fund

stulaunch

I have been paying £25 a month into Aviva Life Deferred Distribution AL1 Life Fund for years. It was Friends Life before that and originally maybe something else when I started it. It say's due to mature Nov 2023. Value of around £16k.
Just not sure what to do with it and whether there is any benefit of waiting for it to mature? Am I correct in thinking because it's an Endownment, it will be tax free on maturity or surrender? 
I'm 57 now and no need at present for it, but just wondered if it was better anywhere else? Maybe into my pension?

dunstonh

 Am I correct in thinking because it's an Endownment, it will be tax free on maturity or surrender? 

If it is a qualifying endowment, then no tax. If its a non-qualifying endowment then there is potential tax if the gains take you into the higher band (after reliefs)

I'm 57 now and no need at present for it, but just wondered if it was better anywhere else?

The product you have went obsolete by the mid 90s.  So, yes, there is better elsewhere.

stulaunch

Thanks dunstonh. It is a qualifying endowment, so no tax.
Adviser from Aviva also told me these policies ramp up in value as it comes up to maturity. I know I should have questioned him on this, but what would he be meaning?

dunstonh

Adviser from Aviva also told me these policies ramp up in value as it comes up to maturity. I know I should have questioned him on this, but what would he be meaning?

Aviva don't have advisers.   So, the person you spoke to won't be one. 

If you are paying in monthly, then you are buying more units each month.   So, the value goes up over time but increasingly so towards the end.   

e.g. 5% on £100 is £5.   5% on £1,000 is £50 and on £10.000 its £500.   The growth rates on larger values gives a higher monetary boost.  In the early years you have lower values. In the later years you have higher.

However, investment returns mean each day could be a positive or a negative.   So, if you had 2 years of negative, you could get less than you have now.