Shall I cash in my Endowment Policy to pay off the mortgage?

writerc
writerc Posts: 1 Newbie
in Mortgages & endowments
I received a letter from my Mortgage Endowment Policy company stating my Adaptable Endowment Plan has achieved the "Targeted Maturity Value" of £82,000. The plan is due to mature in 2023. They are asking me if I want to cash my plan in now to pay off the "Targeted Maturity Value" amount of the mortgage. I don't need to do this. I can afford to continue paying in and it may be that in 2023 most of it won't be needed as I have been paying off extra from my mortgage. I assume there might be a terminal bonus added to the amount saved on maturity which I would lose by cashing in early.
My question is would it be better to keep it going or cash it in now. I can afford either way but I don't want to lose a lot of terminal bonuses if they are still added to a policy at maturation.

Comments

  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    First Anniversary Name Dropper First Post
    Wait if you dont need to clear it now. You may end up with extra lump in 2023 or you may need to find a little extra if the fund dips.

    You probably need some paid financial advice on sums this big.
  • kingstreet
    kingstreet Posts: 38,754 Forumite
    First Anniversary Name Dropper Photogenic First Post
    If this is an AD/Zurich product it's unit linked, not with profits; so no bonuses, annual or terminal.

    You are getting the number of units allocated to the plan multiplied by the current bid price of the units.

    You can surrender or continue with a switch of some of the proceeds into safer funds with the premiums to be invested in the same funds as before or again, in safer options.

    Advice from an IFA might be sensible for that sum.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Old_Lifer
    Old_Lifer Posts: 780 Forumite
    First Post First Anniversary
    If the policy had a terminal bonus paid at maturity, I cannot imagine the Life Office writing to you four years before that date, suggesting that you may wish to consider surrendering the policy.
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