Confused over Prudential endowment - some advice please

Bean_Counter

Hi,

I was hoping to get some people's general thoughts on the following.

I am shortly coming up to the end of the current fixed rate on my mortgage and I had a thought that it might be worth while cashing in my Prudential endowment to reduce the mortgage and then moving the remainder totally to a repayment mortgage.

So, I gave all my mortgage bumf to the IFA at work and he came back and recommended that I do just that. So far, so good.

However, having read some of the posts in this forum, it would seem that there is a reasonable chance that the endowment will payout what it should despite forecasting a significant shortfall every year. Also there is the inherited estate matter lurking in the background.

Normally I would favour the IFA's advice over the forum everytime (no offence), but this time I am not too sure.

Hence my question is: should I leave the Prudential endowment alone for now?

I appreciate I have not posted any details, but really just looking for some general thoughts.

Thanks in advance.

dunstonh

It's a judgement call which has merits both ways. Surrendering the endowment and going full repayment gives you certainty. Keeping the endowment will be a slightly lower monthly cost (normally) and give you greater potential.

Pru are a general exception to the rule when it comes to with profits. They have not failed to pay a surplus on maturity yet and dont expect to. Their performance has been above the projection examples they supply. That can change but Pru are strong and do have a very good record and are well regarded on this front.

Things can alter the decision to keep/surrender. Such as target growth rate and cost of replacement life cover and overall monthly cost. However, in general I would be more inclined to keep a Pru one. Especially when you look at yesterdays bonus announcement.

Bean_Counter

dunstonh wrote: »

However, in general I would be more inclined to keep a Pru one. Especially when you look at yesterdays bonus announcement.

Many thanks for replying.

I had been following your recent comments on the subject and had looked at yesterday's bonus announcement. However it is not my area of expertise and don't wish to make any stupid decisions, especially where the mortgage is concerned.

I think I might hold onto it for the time being and see what developes.

Thanks again.