Unit Trust Endowments

travelling1

We presently have 2 houses, 1 of which is up for sale. However, as the housing market has come to a standstill, we may be paying for two mortgages for a bit longer. This means that money is getting tighter.

I have a unit trust endowment set up in 1999 and whilst it can't be sold. Is there a better time to cash it in? Is it when the exchange rate is high?

I'm hoping that I don't need to, but its a just in case question. Unless you can advise whether at £69.19 per month it is worth running with it for the next 17 years or getting rid of it completely and adding it to the offset mortgage which we will be setting up sometime in July 08.

Oh, and I still need to complain about being mis sold. I have downloaded the letters tonight!

Looking forward to your replies.

dunstonh

I have a unit trust endowment set up in 1999 and whilst it can't be sold. Is there a better time to cash it in? Is it when the exchange rate is high?

Wish it was a unit trust endowment. If it had been then there would be a good chance endowments would still be popular today. Its a unit linked endowment investing into life funds (not unit trusts).

Unless the funds you invest in include overseas investments the exchange rates wont matter. 1999 was a good time to start a unit linked endowment. 25 years term and a lower target growth rate (which was more common by 1999) should see it fall into the better category.

Oh, and I still need to complain about being mis sold.

You are complaining yet you dont appear to know much about the policy. Wouldnt it be a good idea to ascertain their status before considering a complaint?

EdInvestor

Post some more info:

Surrender value of the endowment, and maturity forecasts. Also interets rate payable on the mortgage.

turbobob

There were some structured products based on PEP/ISA funds which were extremely similar to endowments. But more likely to be a unit linked endowment.

If you've received any high risk of shortfall warning letters then you might be out of time for any mis selling complaint.

travelling1

Thanks for your advice. It is a unit fund.
I pay £69.19 per month with a view to it returning £32,850 in 17 years. I shall hopefully telephone them tomorrow to check the surrender value

travelling1

I have technically paid in £6225 and the surrender value yesterday was £6080. It is a mixed unit fund and the estimated rate at 6% is £33,500 making a surplus of £650.

So 2 questions:

1. If I surrender when is the best time to do so? Re the stock exchange. What do I need to be looking for?

2. Is it worth keeping the endowment on at all?

dunstonh

You have only been paying 8 years on the endowment and the break even point is typically around year 10. Being in a position of suprlus at 6% means its pointless you complaining. You are above track and to date the endomwent is doing exactly what it should be doing.

What fund are you in (name required)?

travelling1

It is a Winterthur investment linked fund. Hopefully, that is what you asked for.

EdInvestor

And the interest rate on your mortgage is....?

dunstonh

Winterthur have a large range of investment linked funds. You can hold one of these or 10 of these and switch between them. Which one are you in. What is the actual name of it as that will let us know where you are invested. Where you are invested and its future potential is the most important thing with any investment. It doesnt matter if its endowment, pensions, ISAs, bonds or unit trusts.

travelling1

The name of the policy is the Home Provider. I've had a look through all my paperwork and no where does it state how it will be invested.

At present the interest rate on our present mortgage is 4.7% but this runs out in July. We are thinking about using Coventry BS at about 7%. This is due to the fact that, once the cottage is sold we can put in £50,000 as the policy doesn't have a 10% limit on the extra that you can put in and it doesn't have a tie in period, so if the mortgage rates drop again we can move to another. Also, rather than using ISA's we can add it to the mortgage to pay it off quicker. Our ideal is to pay the remaining £45,000 off within 8 or less years.

Thanks for your assistance so far.