standard life yearly statement

mrsmoneypenny9

I have just recieved my yearly statement from sl on my endowment the figures are as follows:-

plan started apr 1988
matures apr 2013
Monthly payment is £55.43

Basic sum assured = 12285.00
Bonus attached = 8883.36
Minimum amount payable on maturity = 21168.36

Value as at 1.2.08 = 16628.20
Final Bonus = 2811.70
Total current value = 19440.10

forecast for maturity = 25400 (3.75%) 27600 (5.5%)29900 (7.25)

Original Target amount = 37800.00

So 2 questions, should I sell it and pay off a lump sum on my mortgage or keep it till it matures

Q2 The final bonus of 2811.70 is this the same as the terminal bonus, so if I cash it in will I actually only receive 19440.10 as at 1/2/08 obv. or is there another bonus to go on top of this.

I know this has been asked numerous times on here but i need to make a decision soon, also if i do decide to get rid of it should I wait till its 20 year aniversary or will it not make any difference.

Thanks in advance

mrsmoneypenny9

anyone got any opinions/comments/suggestions?

Gorgeous_George

EdInvestor will want to know your mortgage rate and will calculate that you will be better off taking the lump sum and overpaying your mortgage with the premiums saved. Good advice but your SL endowment could perform better than the sample rates used by SL.

dunstonh will want to know the value of your mortgage promise and will point out that SL are performing in the 6.5% to 7% region.

You need to pays your money and take your choice.

GG

EdInvestor

Ring them up and get a surrender value ( which will also answer your Q2).And, as GG notes, please also post the interest rate on your mortgage.

mrsmoneypenny9

Current surrender value is 19770 and my mortage rate is 6.45% also I asked what the mortgage promise was worth at the moment and it is between £650 to £900.

I am seriously thinking of calling it a day with this policy, i think i will be just as well off if not better by cashing/selling it , paying lump sum off mortgage and either overpaying on my mortgage or sticking the monthly savings into a isa/savings account.

My current mortage is for £33K and as it is an offset mortage I will be able to reduce it to approx 13/14k, i have that already in my offset account so my mortage payments will just be the capital amount of the loan.

Does this make sense or am I talking rubbish.

I would be interested in your opinion Edinvestor

Gorgeous_George

I think you will be neither significantly better nor worse off - but the lack of risk with the selling option makes this favourable.

GG

EdInvestor

mrsmoneypenny9 wrote: »

forecast for maturity = 25400 (3.75%) 27600 (5.5%)29900 (7.25)
Original Target amount = 37800.00

If you surrendered it now and used it to offset your mortgage @ 6.45% and also added the monthly premium to the offset account, at maturity you would have 30,907, which beats all their forecasts and involves zero risk.

You might like to see if you can get a bit more by selling it, quotes here:.

https://www.apmm.org

mahatma_andy

I'm also deciding what to do with my SL policy - details are as follows:

plan started 10/86
matures 10/2011
Monthly payment is £34.16

Basic sum assured = 8980
Bonus attached = 7773.45
Minimum amount payable on maturity = 16753.45

Value as at 1.2.08 = 14136.05
Final Bonus = 2581.45
Total current value = 16717.50

forecast for maturity = 20000 (3.75%) 21200 (5.5%)22500 (7.25)

Original Target amount = 27630

I don't need this for the mortgage, so would appreciate any thoughts as to whether this is worth keeping as an investment for the next couple of years, or whether i might as well sell it and invest elsewhere. I've contacted APMM regarding selling it - does anyone have a feel for the likely premium over the surrender value i might expect?

Thanks

Andy

EdInvestor

What is the surrender value, and what interest rate are you paying on your mortgage?

mahatma_andy

surrender value is 16717. The policy is not now being used for the mortgage as we've managed to pay it off after losing faith with SL. My decision is whether to keep it as an investment,or take the money now and stick it in a high interest account - would hope to get 5% net in a 2 or 3 yr bond which I think would beat the middle projection.

I think the question really is how SL could be expected to perform relative to the projections.

EdInvestor

mahatma_andy wrote: »

forecast for maturity = 20000 (3.75%) 21200 (5.5%)22500 (7.25)

Assuming that the figure for the surrender value is correct, and using an investment return of 5%, then if you cashed in the endowment and put the money on deposit also adding in the endowment premium every month to maturity, the return would be 22,125, which almost equals SL's top forecast and beats it's middle prediction with no risk.

You may wish to see if you can get any extra for selling the policy and also if there is any mortgage promise money allocated - though this is not guaranteed and is apparently not being paid out at the moment.

Replace any life cover required before surrender.