Scottish Life Endowment - How is it doing?

Inga

Can anyone shed any light on this for me?

I have a Scottish Life Profitbuilder House Purchase Plan (I think this is a unit linked endowment) and I want to gauge more accurately how far off this will be from paying out the original target, not just the set figures of 4, 6 & 8% growth. I have tried to look at the performance figures on the Scottish Life website but I just don't understand them. I hope you finance wizards will be able to enlighten me.

Start date 11/10/1991
Term 25 years
Target Amount £55,000
Monthly Premium £74.32
Last statement 22/4/05 Projected Payout at 4% 22,400, 6% 27,400, 8% 32,400
Funds - Managed and Worldwide

What is your opinion on this performance - is it doing OK? Should I cash it in or continue paying the premium for the final 8 years?

sheslookinhot

Inga wrote: »

Can anyone shed any light on this for me?

I have a Scottish Life Profitbuilder House Purchase Plan (I think this is a unit linked endowment) and I want to gauge more accurately how far off this will be from paying out the original target, not just the set figures of 4, 6 & 8% growth. I have tried to look at the performance figures on the Scottish Life website but I just don't understand them. I hope you finance wizards will be able to enlighten me.

Start date 11/10/1991
Term 25 years
Target Amount £55,000
Monthly Premium £74.32
Last statement 22/4/05 Projected Payout at 4% 22,400, 6% 27,400, 8% 32,400
Funds - Managed and Worldwide

What is your opinion on this performance - is it doing OK? Should I cash it in or continue paying the premium for the final 8 years?

Inga
My Pru (Scot Amic) Home builder plan runs almost like yours.

Start 1-Jan 1990
Term 25 years
Target amount £46,000
Momnthly Premium £62.61
Last statement Projected payout 4% £35,00 6% £39,700 8% £45,000

Seems to be doing well, last 4 years since 1st red letter it has improved year on year. Total paid in will be about £18K so reasonable investment.

I have changed Mortgage to repayment, in fact I want to pay it in 2 years.

You're pay in will be more and payout considerably less. If you do not need it for mortgage, it may be worth freezing payment and investing £70 elsewhere. Get a surrender value to help you decide.

dunstonh

What is your opinion on this performance - is it doing OK?

Managed grew by 5.15% in 2007 and 9.68% in 2006 and 17.61% in 2005.
Worldwide grew by 6.55% in 2007 and 4.65% in 2006 and 23.30% in 2005

They are just 2 of a range of funds you have available to you.

Being unit linked and heavily in the stockmarket you would have suffered in the recent drops but you are now buying units cheaper. I dont see much hope of this hitting target although you cannot rely on 2005 statements as your data is woefully out of date.

My Pru (Scot Amic) Home builder plan runs almost like yours.

It probably doesnt actually. Although Scot Am did have some unit linked plans, the majority went into with profits rather than unit linked.

Scot Am plans are running with around a 90% plus success rate of hitting target. Although many have yellow or red projections but that shouldnt be relied on as many of those that have matured with surplus were getting warnings of shortfalls. Its just the nature of the projection method not reflecting the real returns.

sheslookinhot

Yes, wrong choice of words when I said it is "run almost like yours".

What I meant was that it started at the same time, was used for the same reason and was around the same value. The policies are clearly not run in similar ways as they are performing quite differently.

Inga

Thank you for your advice, I have asked for a current statement to be sent out. I was surprised it was so long since my last one, I thought they had to send one out at least bi-annually.

If I understand what you are saying, now that I am buying shares cheaply, I should hang on in the hope it will make up some ground over the remaining 8 years, at least enough to consider it an investment. Is that fair?

I know it will not reach the target and I have already changed my mortgage to repayment.

dunstonh

You have the jist of it. Scot Life do have a range of funds and you are in just two of them. You could look at the alternative funds and decide how you want the remaining years to be invested. You may want higher risk or lower risk or a better spread. The managed fund is a bit of a Jack of all trades, master of none fund. You could do better.