Please advise best option for my endowment

Gorgeous_George

...as is the lower rate.


GG

dunstonh

You know as well as anyone that the projections are not reliable in themselves. Just look at your endomwent GG.

I'm not saying this one is a keeper just yet but once the missing info is known, then this one currently has the potential to be a keeper (or not).

TheBees

We too would like some advice on whether to cash in our Friends P endowment or not.

We have paid in for 19 years £51.80 per month - total £11810
6 years to go leaving £ 3729 to pay.
Which will be a total of £15540 paid in over 25 years

Minimum sum assured plus bonuses earned so far £20650
Surrender value £18210

If we cash it in now we will make £6400 against what we have paid in.

If we leave to mature and we only get the projected amount of £20650 (no terminal bonus) then we only make £5110 against what we paid in. Bonus rate 0.25%.

Not sure what percentage this is performing at but it's not good! Last couple years the bonus has been £16.

Is it better to keep it going to the end in the hope that we get a terminal bonus (although the accompanying letter says there is no guarantee of this) or to cash it in now?

Basically, if we cash in, invest the money in a high interest account and pay off lump sums of the mortgage, would we not be better off by not having to paying the premiums and the saving we would make on our reduced mortgage payments? I know it may sound like I have answered my own question but not being a financial whizz I may be missing something!!

Cheers,

TheBees

Gorgeous_George

£51.80 would have needed a return of 4.25% (after tax) to reach your surrender value of £18,210 after 19 years. But don't forget the life insurance element.

GG

TheBees

Thanks
We have looked at the projected figures and at 4% it could be worth £25900 at maturity. They say this projected figure incudes a possible final bonus.

So looking at our figures are we right in thinking that we could make a profit of £10K.

We aren't worried about the life assurance as we have separate arrangements but thanks to your help we think we will probably keep it going.

By the way how did you work out the 4.5% return rate? Is there a formula?

Many thanks for your help.

TheBees

Physio

Thanks guys,

I recieved information this week that did not include special bonus I presume we are not include in this, the latest figures I recived today from NU are current value £32,836.00 and Bonus Profits £8,692.00. Any further advice appreciated,

Regards,

Physio

talkinpeace

I have two endowments. One L&G one C&M.
Being a numbers type person I have a spreadsheet that looks at the payments in the bonus rates (% on sum assured and % on bonus) and checks the bonus paid each year and the total value of the bonus and the terminal bonus required to hit target.
I have been getting red letters from both companies for years.
But when I phone up and ask them where the the numbers come from for the 4% 6% and 8% projections, they cannot tell me.
I have therefore used my spreadsheet and decided to let both policies run to term on the basis that terminal bonus rates are rising significantly at the moment, both on sum assured and on bonus.

Griptool

I have no expertise in the endowment market place or inside knowledge so do not take this as advice

I decide last year to cash in all three of my endowments - one maturing 2010 two in 2012.

I no longer need them to pay of my mortgage (no mortgage) and took the view that the risks currently in the financial system are too great to risk the money. Remember a proportion of the money these funds have invested will be AAA corporate bonds, commercial real estate, MBS and other such risk free assets:rotfl:.

If they manage to keep the wheels on the wagon for the next four years maybe I'll loss a little, if not I've made the right call.

If I'm wrong I'll still be content. The choice is a definite sum now or a possible shafting in the future. For me its a no brainer.

EdInvestor

Could people please stop hijacking others' threads.

If you want endowment help start a new thread and post the following info:

provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity forecasts
Interest rate payable on mortgage

Dick_here

EdInvestor wrote: »

Could people please stop hijacking others' threads.

If you want endowment help start a new thread and post the following info:

provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity forecasts
Interest rate payable on mortgage

Start a new thread for this please