Maturing endowment didn't match payout prediction

Dick_here

I didn't realise that you could do that with a with-profits endowment policy.

dunstonh

!!!!!!_here wrote: »

I didn't realise that you could do that with a with-profits endowment policy.

Unitised with profits tend to have access to unit linked funds and a deposit fund is normal to see in the range.

Conventional with profits funds dont have access to unit linked funds so you dont get that option. However, conventional WP funds tend to only update in value once or twice a year. Sometimes it can make sense to surrender a bit early if you feel the terminal bonus is likely to drop back.

goalhanger

interesting thread to read as i've got an endowment maturing in 4 months. I asked for a projection and statement recently and it says £8000 up on
£60000 endowment. I checked this week to make sure the term. bonus was the same at 55% and it is , luckilly. But , wonder how I would be affected should they decide on a whim to reduce or remove it.
For info I'm with AXA. 25 year term.
Also note the comment re advisors. I had some money invested elsewhere and lost a lot of money with not a phone call or letter from my advisor. And they still pick up a fee even when your investment is going down.
I'd drown the lot of them. They won't EVER get hold of a penny of mine again.
Rant over...

dunstonh

Also note the comment re advisors. I had some money invested elsewhere and lost a lot of money with not a phone call or letter from my advisor.

Is that an IFA or a tied sales rep? If IFA, is it a transactional IFA or a servicing IFA? (i.e. did you employ the adviser on a ongoing review basis or was it just to arrange the policy as a one off transaction)?

And they still pick up a fee even when your investment is going down.
I'd drown the lot of them. They won't EVER get hold of a penny of mine again.

I suggest you differentiate between the advisers, planners and sales reps as they (we) are all different things.

Given the number of bad doctors, nurses, teachers, civil servants, retailers etc that exist, I guess the whole country should jump in the North Sea based on your views.

goalhanger

The advisor was an IFA who collected from my investments even when they were going down the pan. He's now out of business and working for a bigger company.
Even when we arranged to see him to arrange getting out of some of the worst investments he offered no advise and no apologies for not being in touch.
No I won't invest in that type of thing again thats for sure. I don't know enough myself and I don't trust anyone else now.

EdInvestor

dunstonh wrote: »

The information is available. You either use an adviser or do it yourself. You are a fan of the do it yourself option but that does mean taking responsibility.

Most people will have bought through an advisor and thus should have been told the info.Were they?Highly unlikely. That might have alerted them to the risk and unmasked a mis-sale before it even happened. Can't have that.

Are they updated by the lifeco on the possibility? Again,likely only those with unit linked endowments would know about cash funds.

It shouldn't be necessary to have a cash option in a With profits endowment, should it? WP supposedly smoothes out the bumps.

What a pathetic joke it has turned out to be.:(

Dick_here

dunstonh wrote: »

Conventional with profits funds dont have access to unit linked funds so you dont get that option. However, conventional WP funds tend to only update in value once or twice a year. Sometimes it can make sense to surrender a bit early if you feel the terminal bonus is likely to drop back.

But surely by surrendering you lose the entire terminal bonus, don't you ? It may go down year on year, but that is still better than surrendering early and getting none. Or am I missing something ?

Dick_here

dunstonh wrote: »

Given the number of bad doctors, nurses, teachers, civil servants, retailers etc that exist, I guess the whole country should jump in the North Sea based on your views.

Good point, bigD

Rabiddog_2

I suggest you differentiate between the advisers, planners and sales reps as they (we) are all different things.

They all make the same pathetic gurgling noise as they go down tho!

Must admit I wasnt aware of the Cash fund option.. is this an option that can be moved into and out of on a regular basis (6 monthly, yearly?). Too late too miss out on the present drop in the stock market but.. for the future..??

EdInvestor

!!!!!!_here wrote: »

But surely by surrendering you lose the entire terminal bonus, don't you ? It may go down year on year, but that is still better than surrendering early and getting none. Or am I missing something ?

You are.:) Surrender values include accumulated terminal bonus. There may be a penalty imposed for early cash-ins but it would rarely be more than 10% unless the policy was very new, and would often be much less.

Must admit I wasnt aware of the Cash fund option.. is this an option that can be moved into and out of on a regular basis (6 monthly, yearly?).

If you have a unit-linked policy should be possible, though frequent switching might incur an eventual charge.

Switching in and out of WP funds will incur penalties, not that anyone these days would be likely to switch back into WP once out, of course.

However anyone with a unit linked endowment who doesn't need the life cover should consider cashing it in and reinvesting the money in a tax free maxi ISA.By contrast, gains in endowments suffer 20% tax.