cashing endowments-what to do

bitterblue

I am thinking of cashing in two endowment policies, a Standard Life with profits and a Norwich union unit linked. They are worth £21000 jointly when cashed in. I have a mortgage of £71500 at the moment, part interest only and part repayment, It is a fixed interest and would incur a £1000 early part repayment charge. If I paid off part of the mortgage with the endowment money and went completely repayment it would cost me roughly the same per month minus the endowment payments.

What I want to know is should I do this or would it be better to keep this money and invest it in a different way ie, high interest accounts Isa's or even property. I would really appreciate it if someone could offer me some advice as to what my options might be.

Cheers bitterblue

dunstonh

The norwich union unit linked endowment has the potential to out perform savings accounts or high interest iSAs with the right funds. The NU property account for example hasnt gone below 10% a year average for over 10 years. Perhaps you should look at what funds are available and reselect more appropriate funds.

Standard Life demutualization in the next 12-18 months will result in a payout which you will not get if you surrender. After that point, Standard Life have given indications that they will allow movement of the funds into a wider range giving better growth potential than the with profits fund.

EdInvestor

Hi Bitterblue,

I'd wait for the demutualisation payout and then review the Standard Life position.I agree it's also worth checking the fund availability on the NU one and move to a better performing one. The whole thing can be looked at again next year after the DM - there's not much point in making a move anyway until you get to the end of the repayment charge period.