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Axa Endowment - What Should I Do ?
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Thanks, dunstonh. You da man !
One more though - are these decent funds in your view, or not ?Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
I wouldnt have my money invested that way.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
!!!!!!_here wrote: »Sum assured and 'target amount' £15,300
Current projections:
@6% - s/f of £100
Ok let's do a basic comparison.
If you surrender this endowment and place the lump sum in a cash savings account @ 6%, also paying in the monthly endowment premium to maturity, you would end up with 15,782.
This compares with their forecast @6% growth of 15,200.
The difference represents the cost of the life cover, the charges and the taxes.
The net effect of this is that you are taking a risk (with the endowment) to achieve a likely return that is lower than if you didn't take a risk.
There is no point in doing this.I hope you can see that. Trying to keep it simple...0 -
If you surrender this endowment and place the lump sum in a cash savings account @ 6%, also paying in the monthly endowment premium to maturity, you would end up with 15,782.
tax?This compares with their forecast @6% growth of 15,200.
which is net of tax, charges and cost of life assurance.
The net effect of this is that you are taking a risk (with the endowment) to achieve a likely return that is lower than if you didn't take a risk.
How do you know the return is going to be lower?
For example the discrete annual return on the AXA UK equity fund was:
2007: 4.35%
2006: 15.92%
2005: 18.27%
2004: 7.64%
2003: 17.63%
From May 2003 (launch of ING direct) if you had put £50pm into ING direct you would now have £3178.40 compared to £3416.60 with the AXA UK Equity fund.
Investment obviously contains risks but if you accept the risks then you also need to look at the potential. Using 6% net on an investment against 6% gross on cash isnt comparing like for like.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
If it isnt clear you need to ask for the current value and the surrender value. If they are the same, then no penalty exists.
If there is no penalty to get out and you dont need the life cover then stocks and share ISAs are more tax efficient. If there is a penalty then this has to be taken into account.
I phoned them up, there is no penalty. Thanks :THi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
In which case, unless you need life cover, there is no reason to stick with it.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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In which case, unless you need life cover, there is no reason to stick with it.
I don't. I guess the only reason I'm tempted to stick with it - and I realise it's a negative one - is that after 11 years of monthly investment, I'll have only made a really small profit (obviously I've had the life cover too). If I continue for a few more years to maturity, I'll hopefully make a larger profit. Is that just a bit daft of me ? :rolleyes:Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
is that after 11 years of monthly investment, I'll have only made a really small profit (obviously I've had the life cover too). If I continue for a few more years to maturity, I'll hopefully make a larger profit. Is that just a bit daft of me ? :rolleyes:
Put it into the same sector split in stocks and share ISAs and carry it on to the original investment date and it will end up with a higher figure still.
The AXA funds are largely sector average. You have an opportunity to switch your investments to something better at nil or virtually nil cost.
Think of it like this; You start a journey in a 20 year old car and half way you switch to a modern car which is more comfortable, more fuel efficient and goes faster. You still get to the destination. You are just doing it more efficiently.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Think of it like this; You start a journey in a 20 year old car and half way you switch to a modern car which is more comfortable, more fuel efficient and goes faster. You still get to the destination. You are just doing it more efficiently.
But they were built to last in the good old days...
Seriously, thanks. It's a good analogy.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
tax?
Try N&SI index linked certs, tax free.Using 6% net on an investment against 6% gross on cash isnt comparing like for like.
Actually the main reason I used 6% was so he could also compare the return in a tax free ISA as well. Justified IMHO as it is achievable in cash.Trying to keep it simple...0
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