Abbey Life Endowment

The_Rogue

Hi Folks

I have been paying into an Abbey Life Endowment for 18 years. The premiums include life cover and critical illness cover.

The returns have been poor - probably in total not worth much more than the premiums invested.

So I have asked AL for the surrender value - which last year was 25k. It is a unit-based fund rather than with profits.

I don't need the life or CIC cover as I can get these cheaper elsewhere. I'm thinking of surrendering the policy, and investing what I get back into ISAs and paying off some of the mortgage. In my view I will get better returns this way.

So my question is - for this type of unitised product, are there any pitfalls I should be thinking about. Is there any reason why I might consider keeping the policy going until it matures in 7 years time even though I expect the returns to be poor?

EdInvestor

The_Rogue wrote: »

So my question is - for this type of unitised product, are there any pitfalls I should be thinking about. Is there any reason why I might consider keeping the policy going until it matures in 7 years time even though I expect the returns to be poor?

No. A modern ISA is a better product than an endowment,which usually has high charges, poor fund choice, and is not tax free.

dunstonh

Abbey Life have a fair range of funds available. Not on par with modern fund supermarkets but then they werent around 18 years ago.

It isnt the endowment that is performing good or bad. It is where you are invested and the funds you utilise. You would expect a unit linked endowment to break every around 10 years (on 25 year term).