Endowment Surrender Help

mr_santiago

Newbie Alert! - apologies in advance for my lack of knowledge

Stumbled across this site the other week when trying to sort out my mortgage finances - some excellent tips and advice found so far:o .

My situation is that the OH has two endowment policies that are now 'managed' :mad: by Phoenix and due to their poor performance and outlook, we have decided to surrender these and put the proceedings into our OneAccount mortgage.
We has requested surrender values, and although the first appears to be a reasonable return, the second is paying less than has been invested! - looking for some advice as to whether this is normal / expected..

Details:-

Policy1 (originally Cornhill)
Started in April 1993 with a target value of £26,000.
Slow start endowment, £20/month in year1 -> £25 year2 etc..upto £40 in year5 and ever since.
By my simple arithmetic, this equates to ~£6080 paid in.
Surrender value is £7,218 - so not too bad?

Policy2 (originally Britannic)
Started in August 1998 with a target value of £27,500.
Monthly payment of £79.32.
I make this £9121 paid in.
Surrender value is £8,057 ...

My wife contacted Phoenix to clarify this amount and their response was that 'bonuses are not paid until after 15years' (?). She didn't ask why the surrender value was so much less than what had been paid in..

So, should we just accept these amounts and cut our losses on these pathetic investments? or is there something wrong here?

Many thanks in advance for any assistance....

EdInvestor

mr_santiago wrote: »

Policy1 (originally Cornhill)
Started in April 1993 .

Policy2 (originally Britannic)
Started in August 1998

Endowments have their charges front end loaded, so will usually be in this situation for the first 10 years or so, you can see the differewnce between the two.

So, should we just accept these amounts and cut our losses on these pathetic investments?

Yes, no point in holding onto zombie endowments, they will not perform.

Dick_here

Part of the reason for the surrender value being low is that you've had the life cover all along.

mr_santiago

Thanks for the advice folks - appreciate it!!;)