Red Alert letter from Standard Life - panic?

signofthetimes

Thanks for all the input, much appreciated.
With regard to the query on any bonuses, based on the current statement only £59.26 bonus was added during the last year - £5,683.95 during previous years =£5,743.21 in total.
The statement also refers to 0.5% bonus rates from Feb 2007 to 31 Jan 2008 on bonuses already added, with 0.25% on sum assurred. Thats everything on the latest yearly statement. I will obviously need to get any other info, as mentioned by dunstonh, from SL direct. Thanks again!

dunstonh

I dont think your terminal bonus is included in your projections.

If you take your minimum guaranteed maturity of £18077 and add £1505 (i would check a more recent figure as that may be before the recent bonus announcement which saw mostly increases) then you have a current position of £19582. Thats not far off the low projection. Indeed, the current position would need to grow at 1.2% p.a. to match the 3.75% figure if you include the terminal bonus. Some of that will be charges but not that much at this stage. That "suggests" that the terminal bonus isnt included in the projections. Which is why I would want it in writing.

I cannot see a surrender value in your post. I may be missing it as Ed seems to have done a calculation from the surrender value but I cant see it. We need to look at the cost of surrender vs the cost of keeping.

Basically look at the surrender value and then look at the low projection (to be on safe side), add in current final bonus accrued to date (again assumes no more increase) and add on mortgage promise value. Then compare that to the surrender value and see what the difference is. Then factor in your remaining monthly payments. Then from that you can decide if there is a significant difference or if not a difference where there potential is "likely" to be worthwhile. That is still an estimate but often with these it isnt the potential gains you are looking at but the cost of surrender.