Funkii Munkii

Any Endowment experts on SN who can offer advice ?

I took out an Endowment about 20 years ago on a property I was buying, I changed to a repayment mortgage years ago and have keep the Endowment on as an "investment".

My question is it has 5 years left to run and current indications are I will be lucky to see 30-40 % of what it should have paid.

So should I continue paying the premium for another 5 years or is it worth cashing it in for whatever I can get for it, would another 5 years premiums be worth my while or just a waste of money.

I'm also a little confused as to what can be construed as a "mis sold endowment" I have the original Mortgage paper work from the Leeds BS and nowhere does it state you are guaranteed "x" amount, so what really does class it as mis sold or not ? I could argue that back in 1991 the Manager of the local Leeds BS said it was the best option for us, not only would it repay the mortgage but would give us in the region of 33% lump sum on top, I would imagine unless this is in writing on the Mortgage quote/policy it cant be construed as mis sold, the FSCS site is not that clear.

Any advice welcome.

Trout

iTrader: (1)

I would strongly recommend sticking with it.

Even with only five years to go you are likely to realise more than selling it now. Selling it now you will not get 100% of value.

Funkii Munkii

Thanks Trout, that's how I was seeing it, I've come this far may as well see it through

I'll do some more homework on the mis selling side of things, if you dont ask you dont get etc etc

Trout

iTrader: (1)

I think the window on endowment miss-selling closed a long time ago - I have two endowment of similar age.

room 512

I think you are right in that, probably 5 years or so ago?

I remember that when we got our compensation for mis-selling we had to do very little. Just wrote to the BS with a standard letter off Martin Lewis' website saying that we think we were mis-sold and they agreed, offered us a final settlement amount for their error and that was it.

PaulC72

why not ask for a cash in value before doing anything at least that way you willbe able to make an informed decision instead of guessing ;-)

Trout

iTrader: (1)

A surrender value will be significantly less than full value. Unless the monthly payments are an issue (unlikely on a 20 year policy) then stick with it.

EddScott

The endowment will also carry an element of life assurance.

On death, the higher is paid either the cash value or the life assurance value (usually). If you cash it in now and die in 6 months and the life assurance is more than the surrender value you (or rather your estate) will have lossed out a bit.

Endowment miss-selling was a retrospective decision by the regulator. Very high interest rates and over optimistic investment performance offered by the providers had advisers thinking the product they were selling would easily meet its target and most of the illustations I've seen of the time gave big excesses. Rates dropped off a cliff, investment performance wasn't as expected and someone needed to take the blame. If anything poor guidance by the regulator to the advisers caused the miss-selling. Not flogging endowments for commission to advisers (the adviser was still earning the same if not more from the mortgage and the corresponding term assurance if the mortgage was a repayment type)

njkmrs

I think you will miss out on Terminal Bonuses if you cash in now ,and you will probably get back what you have put in if your lucky .I am in the same position and enquired about 2 yrs ago .I decided its not worth cashing in .Mine is predicted to pay out about 40% ish of what I was told .
Tried to do the old miss selling gag and they told me to get Fluked !!!

Funkii Munkii

I forgot about the life insurance aspect, I hope I dont have the need to use it in the next 5 years !!.

Terminal Bonus, hardly seems a suitable term where Endowments are concerned does it


Thanks for the input guys

Trout

iTrader: (1)

There is a very small possibility of miss-selling compensation; but you would have to present a very good argument as to why you did not respond to the 'red letter' you would have received some years ago.

GarethE

iTrader: (1)

I'm in the same position with 5 yrs to go, and I'm staying with it.

As already mentioned by others unless you absolutely need the cash now, which the surrender value is likely to be a lot less, or you can't afford the monthly payments, you'd be better off staying with it.
It also proved a plus point during my financial review, and of course beneficial because of the life cover.