Urgent Help- endowment sell or get loan

cratchit

Can anyone help me please. My endowment complaint is with the Financial Ombudsman, he's had it over 15 months and says due to volume of complaints it hasn't yet been forwarded to an adjudicator, I first contacted Abbey National in 2003, so it's been going on a long time. My endowment is with Scottish Amicable, taken over by Prudential, it's a conventional with profits policy. My statement just received says:

Date of maturity 23/04/2007 Minimum Death Benefit £16,500.00
Rates of 2004 bonus declared 0.80%/1.50% Amount of benefit £7,326.00 Existing Declared Bonus £4,915.99 New Declared Bonus £132.34 Total Bonuses and Benefits as at 31/12/2004 £12,374.33.

My monthly repayment is £38.45. I am 56, unemployed and struggling to survive. My money has just run out so I've got to get some capital to survive on. My problem is what should I do? I can't take advantage of cheap credit cards, because I have no income, therefore my only option is to try to borrow against the endowment as it's the only asset I have. My husband became mentally ill after 27 years of marriage and I lost everything dear to me, him and my home and find myself now living in reduced circumstances in rented accommodation. Should I get a £5.000 two year loan from Barclays to tide me over until the policy matures or would it be cheaper to surrender the policy bearing in mind it only has 21 months to run at £38.45 per month. I don't need death benefit - please help someone. Could someone help me quickly because I have to sort something out this week and don't want to commit myself to anything I don't really know enough about. Thankyou

EdInvestor

Hello cratchit,

Sorry to hear things are in such a bad state.:(

Can you ring them up tomorrow and find out what the surrender value of the policy is, if you cashed it in immediately?


It appears that it will be worth a minimum of 12,374 when it matures in a couple of years' time. So let's see how much it would be worth if you took the money now.

Post the figure and we can take a view.

cratchit

Thanks ed Investor, I'm so relieved someone may be able to offer advice.
I was told today (24 July) surrender value would be £14,575 inclusive but if profits fell they reserved the right to lower this amount.

I contacted Barclays Bank (my bank) today and was quoted 9.9% rate on £5,000 over 36 months (£21.41 interest per month) the lower rates only applied to much bigger loans. I contacted Barclaycard and was told their loan rate started at 5.7% but was dependent on status and as I don't have a Barclaycard (my husband was principal cardholder) and am currently unemployed with no discernible income, I don't know what my status would be. I know I had trouble selling my shares because I hold no credit cards etc, and was alarmed when I checked my credit rating to see something saying "check was run for moneylaundering" which I assumed was the check done by the company to whom I wished to sell my shares and then, declined to purchase them (I eventually had to sell them to a friend). I have never been in debt in my life and find it very distressing to be in this situation - just goes to show, none of us know what's round the corner.

I would be grateful for any thoughts you may have on how I could obtain a small loan with the lowest loss in interest. I did note some bank accounts have 0% overdraft facilities, is that a possibility or would it be too complicated? Once again, many thanks for taking the time to respond, it's very much appreciated.

EdInvestor

Cratchit

I would suggest that you surrender this endowment pronto and forget about any idea of borrowing money and waiting for it to mature.

This is because the endowment still has some terminal bonus in it. It is IMHO more likely that this TB element will be reduced (as per their warning) than go up.In any case, given your situation, it wouldn't be sensible to take the risk.

If you took the money and were in a position to put it in the bank @4% and also paid in the premiums, you would end up with 16,715, significantly better than the guaranteed value of 12,374.We can only compare guaranteed with guaranteed and make a guess at the terminal bonus amount, if any.The old idea that you had to wait till maturity to get the TB is no longer applicable BTW.

I would be inclined to suggest to any inquirer to take the money and run.In your positon, it's a no-brainer.

Surrendering the endowment shouldn't make any difference to your misselling complaint as you've already logged it. Check with the FOS first about that if you're worried.

Best of luck for the future. Anything else we can help you with?

cratchit

Thankyou for your advice, I'll contact the Ombudsman to make sure selling the policy will not negate my claim although reading some of the messages it would appear the compensation some people are receiving is not very much anyway.

Once again, many thanks for your speedy response.

sleepless_saver

Can I suggest that before you make a decision, you get advice on benefits for two reasons. One is to ensure you're getting all you and your husband are entitled to, the second is to check that cashing in your endowment is not going to affect the level of any income/savings related benefits you get. What Ed has suggested may be perfectly good advice looking at the endowment in isolation, but there are other things you need to consider as well.

CAB would be a good place to start.

I hope it all works out for you :grouphug:.

EdInvestor

Good point, I'm certainly no expert on benefits.

sleepless_saver

Try a quick post on the Benefits board, they're a helpful lot.

cratchit

Thanks everyone for all the good advice, I didn't even know there was a benefits board - this is a world that is very new to me. I'm afraid I lost my husband as well as my whole life, so I'm struggling alone to deal with the surreal circumstances I find myself now living in and long for the peace of a home of my own.

We were an ordinary professional couple, and I find myself wondering how could this happen to me?

I'm afraid when mental illness strikes it's an insidious sickness that eats away at the person long before it erupts into full blown manic depression/schizophrenia and finally hyper-mania, which was what happened in this case. By the time you get to this situation, unfortunately, all your money and security have long since gone. I remember reading the story of the husband of Nichola Pagett (the gorgeous actress in Upstairs/Downstairs) and his heartache is very similiar to my own, except he still had the familiarity and security of his bank account, his career, his children and his home - I lost the lot! I had no reason to doubt my husband, we'd been together 27 years, he was a kind loving man, so I was totally traumatised by seeing him in this state and obviously, by the devastating circumstances it has now plunged me into.

It would seem I am humiliated and degraded on a daily basis by the young girls in the employment agencies, obviously in an age obsessed society unless you have business contacts, you don't have a hope in hell of starting a new and rewarding career or earning enough to take care of yourself once you're over 50. I'm forced to humiliate myself in the job centre in order to be eligible for the meagre amount I'm trying to live on - (I showered in the dark for a week last week,because I couldn't afford the cost of the special light bulb), I feel physically sick before I have to enter it's vile doors, being asked repeatedly why I haven't found work, I feel like punching them in the face, I just hope they find themselves in the same position as me one day.

I'm signing off now and would like to end on a positive note. I do have talents. I have written a series of children's rhyming short stories and also the outline for a romantic thriller blockbuster movie but can't get anyone to even look at them, so if anyone out there has contacts in this field, please help - I desperately need to earn a living and more than that, I need to feel I have some worth, some value of my own.

I'm not normally a depressing person and won't allow myself to be beaten so I would just like to ask all of you to take heed of what happend to me. No matter how much we all plan for our future, none of us knows or can even imagine what it might hold ,so be sensible, make a few investments to take care of yourself, but then live for the day, don't keep putting things off, do them now, don't dwell on silly things and end up regretting the memories you could have had and which will never come again.