Norwich Union endowment

dunstonh

Not normally recommended, guaranteed value is reduced, charges eat away at the value etc.

Not necessarily. Many plans cease or lower charges if paid up. Endowments often have no explicit charges on them later in the term anyway.

You say its not normally recommended but the FSA would disagree with you. It is an option that should be investigated, especially where there is a MVR or high surrender penalty.

There are endowments that have surrender penalty free exit points. i.e. from 10th or 15th anniversary, no surrender penalty applies. I came across a Pearl policy a few weeks back which was in year 9 and from year 10 becomes surrender penalty free. Therefore, making the plan paid up until year 10 was the best advice.

Yes, grahalex could look into all that.It depends if he wants to continue taking risks - he's not too happy about having done this in the first place and incurred a shortfall, remember.

There are usually better ways to invest in the stockmarket these days than via (very)old endowment policies with high charges.

He may not need to continue investing in the stockmarket. There may be a range of funds and sectors available to cover a whole range of risk profiles. Charges may no longer exist on the plan. Endowments are heavy on charges but these tend to be mostly, if not all, front loaded. So, if you have paid these already, then they are done and dusted and no longer a consideration. That would very much depend on the plan.

Frankly I think it's absolutely pathetic that an endowment which has been going since 1984 can offer a TB of only 14%.This policy should have benefited from 20 years of booming stockmarkets.

Since 1984, there hasnt been 20 years of booming stockmarkets. Plus all the money wasnt invested from day 1. Had it been all invested from day 1, then it would have a very good return.

grahalex

I think i'll let this policy run to maturity.As I said this policy isn't linked to a mortgage and with the stock market improving lately, hopefully I won't regret it.

Milarky

The problem with knowing whether an endowment will reach a given figure in the future [etc] is that with profits obscures the true value of your holding. What you finally get depends largely on the size of any terminal bonus - which can be cut at any time. Have NU terminal bonus rates stopped falling them? If they have that's encouraging, but don't expect them to go up anytime soon. Annual bonuses have also been cutting - representing a more insidious form of reduced value - as bonus is paid on bonus already held [etc]

The near you get to 2009, the more 'boxed' in your policy becomes. The fact you are getting out in 2009 [and not 2012/13 - the peak year for maturies] means you are a bit ahead of the game. In other words, the shortness of time left in your policy ought to limit the remaining 'downside' whilst offering any 'upside' available.

I'm with Standard Life, so with a demutualisation in prospect it's even more complicated to work out the best exit strategy. They were once the largest holder of equities [because they were arrogant, and no one could tell them anything] and now they hold among the least proportion in shares following a firesale in early 2004. They sold at around 4500 - they won't confirm this but everyone knows it - and the FTSE level is now 20% higher, and they are holding bonds instead.This has harmed an already damaged fund from future recovery. The lunatics are in charge of the asylum and they expect us to vote their change of heart through [they opposed DM in 2000 by saying to policyholders that it would raise no money - well it looks like they were right about that, just wrong about the year!] and give them bigger salaries [etc]

EdInvestor

Hi Milarky

They sold at around 4500 - they won't confirm this but everyone knows it - and the FTSE level is now 20% higher, and they are holding bonds instead.This has harmed an already damaged fund from future recovery.

Actually they had no choice in this, the FSA forced them to sell.However although it had the unfortunate downside you mention, it's really hard to see that anything else could have been done.The company was holding millions of policies with guarantees, which were not covered with safe investments and they were fast running out of money.If I was the FSA I too would have insisted they switched adequate funds to cover the guarantees into bonds.It would have been irresponsible to do anything else. There was a very clear risk of another Equitable Life.

The lunatics are in charge of the asylum and they expect us to vote their change of heart through [they opposed DM in 2000 by saying to policyholders that it would raise no money - well it looks like they were right about that, just wrong about the year!] and give them bigger salaries [etc]

I'm pleased to say that the lunatics (Messrs Scott Bell and Iain Lumsden)who punted the WP fund in equities and lost all our money left some time ago,taking their arrogant insistence that Standard remained mutual away with them.

It didn't take the new lot long to decide that DM was not only desirable, but a requirement for survival, following the loss of the most of the free assets - the DM will raise new replacement capital as well as pay out windfalls to us.

It's true the windfalls are unlikely to make up all our losses: but I'm hopeful they will make a significant dent in them.It's still the case that the payouts on Standard's long term policies are still among the best of all the insurers.

Let's hope we can make up more of the losses through a good performance by the shares when they float - plus a high dividend policy.So far the City is encouraged by new management's efforts and so am I. You can't turn around a supertanker like SL overnight, but by next year, things could look a lot more positive, fingers crossed.

dunstonh

Have NU terminal bonus rates stopped falling them? If they have that's encouraging, but don't expect them to go up anytime soon. Annual bonuses have also been cutting - representing a more insidious form of reduced value - as bonus is paid on bonus already held [etc]

The NU unitised with profits plans have been seeing increases for the last 18 months. The conventional with profits plans increased a few months back.

I'm with Standard Life, so with a demutualisation in prospect it's even more complicated to work out the best exit strategy.

SL have suggested that they may offer a switch from with profits to the unit linked range at no penalty (after DM).

grahalex

UPDATE
I got a courtesy call today from Norwich Union ,because I had rung them last week for info on my policy.I said that I was concerned about the shortfall.I have been given a number to ring to discuss the matter. I also mentioned that although I had asked for details about when the policy was set up, I hadn't had the info yet.She said that that info takes a while to collate.
By the way Malarky I also have endowments with Standard Life.

grahalex

I have now recieved the name of the company that set up my endowement with the Norwich Union in 1984.But the name isn't familiar to me and is no longer in existence.I thought it was through Leeds Perm. Can I still make a claim for misselling and who do I make a claim to.If I do claim can I keep the policy going to maturity?