headmelter Posted March 16, 2008 Author Share Posted March 16, 2008 No they will send you forms to sign and send back , that can take a week or two then they sellit , pot luck what the unit price is on the day . Odds are we'll have a black Monday, Tuesday, Wednesday, Thursday or Friday by the time the forms arrive via snail mail, and the units will be worth two pints of lager and a packet of crisps. Quote Link to comment Share on other sites More sharing options...
numpty Posted March 16, 2008 Share Posted March 16, 2008 (edited) Mrs HM and myself still have an endowment (unit trust) which we took out when we bought our first house. We had decided to hold on to it as a 'savings policy', but it is performing very poorly.We have been paying it for 10 years at £97 a month, its target was for £55k but is way off. I contacted the company on Friday and was told the value was approx £9600 but had been worth £10300 in mid Jan. By my calculations I've paid about £12k in and I got £850 four months ago from them after a claim I put in about misselling.The life insurance component is only about a tenner. So I reckon I've lost about £1k. I suppose my question is should I surrender it tomorrow due to the increasing amount of bearish news. It's my feeling the SM is in for a bumpy ride over the next few months and it's likely to depreciate further or do I hold on to it? Does anyone have any links to companies that prchase endowments at better rates than their surrender value? I tried two on thisismoney but they did not list the company the endowment is with (Winterthur life). All opinions greatly appreciated. (Mods please give the thread a while before moving, I've listed it on the main board in the hope of getting some response.) As it is unit linked there are no buyers I am aware of who buy second hand unit linked policies. Generally these investments, as they are no longer being sold, are treated as whipping boys and the returns no longer matter; they are not selling new policies. I would be inclined to cash it in and pay off £10k of your mortgage. You will get a 5-6% rate in effect tax free! If you are slight risk taker why not pay off £8k off the mortage and put £2k into gold Edited March 16, 2008 by numpty Quote Link to comment Share on other sites More sharing options...
Guest tenant super Posted March 16, 2008 Share Posted March 16, 2008 Yes the stock market will continue going up and down until your plan reaches maturity. This is clearly something that you are unprepared to tolerate and as you no longer seem bothered about £55K worth of life cover you should sell it. Pay down debt now with the money or if HRT consider adding to a pension to get 40% tax relief - not sure if worth the 20% relief if basic rate taxpayer. Look up Traded Endowment Policies on google, not sure what the market is for unit linked products as most traders like to buy with profits funds so as to speculate on the terminal bonus. Obviously compare the trade value with the surrender value. Note that these policies are long term and it is pretty dumb looking at the fund value after only two fifths of the term and we are coming into a period where units you buy are likely to be extremely cheap for an extended period. Quote Link to comment Share on other sites More sharing options...
Guest tbatst2000 Posted March 16, 2008 Share Posted March 16, 2008 I think he would be lucky to get a IFA for 50 , there see 10k and will just automatically think about getting 1-2% out of him or tuck him up with some other "product" . That's why I said go for one that charges by the hour rather than by commission - that way, the 1-2% doesn't enter into it because the advisor doesn't get any of it. Agreed that going to a commission based advisor would be like jumping from one shark tank into another. Quote Link to comment Share on other sites More sharing options...
A.steve Posted March 16, 2008 Share Posted March 16, 2008 (edited) Odds are we'll have a black Monday, Tuesday, Wednesday, Thursday or Friday by the time the forms arrive via snail mail, and the units will be worth two pints of lager and a packet of crisps. Luckily mine are only worth that to start with. It is argued that selling is quicker than surrender... http://www.endowments.uk.com/ http://www.lsaendowments.com/ http://www.endowmentsurrenderplus.co.uk/ (Definitely not a definitive list - and not an endorsement... of course.) I'm pretty sure that mine is doing much worse than cash in a building society... Edited March 16, 2008 by A.steve Quote Link to comment Share on other sites More sharing options...
headmelter Posted March 16, 2008 Author Share Posted March 16, 2008 (edited) I think he would be lucky to get a IFA for 50 , there see 10k and will just automatically think about getting 1-2% out of him or tuck him up with some other "product" . Agree though with Hargreaves though , i get the feeling 10k ain't much to the OP so he could cash the endowment in , and whilst he's waiting for the cheque he could be researching and deciding what funds to invest in with Hargreaves , or just hold it in cash with them until he decides earning a reasonable amount of interest , he could even wrap most of it in 2 equity ISA's . I still consider £10k a reasonable amount of money but I am very green with regards to investment. I had thought about buying some yellow shiny stuff and drip feeding an equity ISA in the coming year. We've maxed out our cash ISAs for this year and I feel we Have too much exposure to cash only, as inflation seems to be the order of the day. I'm pretty lucky to be mortgage free, having sold in the south east, 4th quarter 2004 and buying in NI before the ridiculous 'boom'/bubble developed. I am currently saving/investing so I can move to a larger house (kids get bigger very quickly), in probably 3 or 4 years time so anything I do now is intended to last that long, unless of course I become more educated and am more confident about how and where to invest. Edited March 16, 2008 by headmelter Quote Link to comment Share on other sites More sharing options...
headmelter Posted March 16, 2008 Author Share Posted March 16, 2008 Luckily mine are only worth that to start with. It is argued that selling is quicker than surrender... http://www.endowments.uk.com/ http://www.lsaendowments.com/ http://www.endowmentsurrenderplus.co.uk/ (Definitely not a definitive list - and not an endorsement... of course.) I'm pretty sure that mine is doing much worse than cash in a building society... Thanks, I'll check these out, they might be able to improve the offer to get the missus a packet of crisps as well. Quote Link to comment Share on other sites More sharing options...
headmelter Posted March 16, 2008 Author Share Posted March 16, 2008 (edited) Yes the stock market will continue going up and down until your plan reaches maturity. This is clearly something that you are unprepared to tolerate and as you no longer seem bothered about £55K worth of life cover you should sell it. Pay down debt now with the money or if HRT consider adding to a pension to get 40% tax relief - not sure if worth the 20% relief if basic rate taxpayer. Look up Traded Endowment Policies on google, not sure what the market is for unit linked products as most traders like to buy with profits funds so as to speculate on the terminal bonus. Obviously compare the trade value with the surrender value. Note that these policies are long term and it is pretty dumb looking at the fund value after only two fifths of the term and we are coming into a period where units you buy are likely to be extremely cheap for an extended period. Are you suggesting maintaining the policy for the time being. I understand that if the SM nosedives it enables the purchase of more units. If we are headed for a bear market, which seems to be the case, is it probable I might actually make a profit on the policy? I know this is all chrystal ball stuff but with the bearish news thats floating about at the minute I would be reluctant to throw good money after bad. Edited March 16, 2008 by headmelter Quote Link to comment Share on other sites More sharing options...
headmelter Posted March 17, 2008 Author Share Posted March 17, 2008 After making several phone calls this morning I have been told that there are no companies that will purchase a unit linked policy at the minute and the surrender value from the original company is my best option if I want to cash it in. Contacted the company who offered me alternative 3 options: 1. reduce premiums by 50% 2. Stop paying but maintaining the life cover element. 3. Switch funds. No 2 looks good at the minute. Quote Link to comment Share on other sites More sharing options...
FunkyGibbon Posted March 17, 2008 Share Posted March 17, 2008 Hi Headmelter I too have a poorly performing unitised endowment that I have held for 19 years and intend to continue to maturity. Yes, I agree that the returns seem to be decidedly below expectations. However, one item nobody has mentioned and worth bearing in mind is that if you keep the endowment to maturity, any gains should be entirely free of UK taxation. Especially if you have maxed-out your ISA allowances - it may be worth a second look. Another point worth considering is that most of the dramatic gains in value should be in the later term of the endowment (e.g. the last 5-6 years) so the 10K you have after 10 years may be no accurate indication of your future savings pot. If you draw up a spreadsheet of the lifetime of the endowment, you may be able to see this illustrated in more detail. Quote Link to comment Share on other sites More sharing options...
headmelter Posted March 17, 2008 Author Share Posted March 17, 2008 Hi HeadmelterI too have a poorly performing unitised endowment that I have held for 19 years and intend to continue to maturity. Yes, I agree that the returns seem to be decidedly below expectations. However, one item nobody has mentioned and worth bearing in mind is that if you keep the endowment to maturity, any gains should be entirely free of UK taxation. Especially if you have maxed-out your ISA allowances - it may be worth a second look. Another point worth considering is that most of the dramatic gains in value should be in the later term of the endowment (e.g. the last 5-6 years) so the 10K you have after 10 years may be no accurate indication of your future savings pot. If you draw up a spreadsheet of the lifetime of the endowment, you may be able to see this illustrated in more detail. Thanks, I do think I'll hold on to it for the time being but reduce the premiums for a while. It's dead money at the minute, but the life assurance is handy to have. Quote Link to comment Share on other sites More sharing options...
Zadkiel Posted March 17, 2008 Share Posted March 17, 2008 Thanks,I do think I'll hold on to it for the time being but reduce the premiums for a while. It's dead money at the minute, but the life assurance is handy to have. ...unless I'm confusing 'with profits' endowment policies is nthere not also also some kind of terminal bonuses added in the final year. This can make quite a difference. Quote Link to comment Share on other sites More sharing options...
headmelter Posted March 17, 2008 Author Share Posted March 17, 2008 ...unless I'm confusing 'with profits' endowment policies is nthere not also also some kind of terminal bonuses added in the final year. This can make quite a difference. No bonuses added to a unit linked policy I'm afraid. The value of the purchased units fluctuates with the SM. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.