Lindor Posted September 2, 2014 Share Posted September 2, 2014 Not being financially minded I'm looking for advice please on an endowment policy which will mature at the end of this month. I have been given 3 options, Cash it in, £7,000 less, but I expected worse Continue the policy Or cash it in and invest the money with them Any advice would be greatly appreciated. Link to comment Share on other sites More sharing options...
TerryDXB Posted September 2, 2014 Share Posted September 2, 2014 Endowments, especially 'With-profits' are a pretty much discredited investment - generally poor performance with no transparency in fees/costs. Unless you are really happy and can see some guaranteed benefits, then continuing the policy would tie your money up with them for a longer period - can't see the point of that. Is there a penalty for just cashing in and taking the money and using/investing elsewhere? Or a benefit in reinvesting the money with them? I'm a little cynical, but if the company has already made their money from your investment and given you GBP7000 less than you expected, I'd be tempted to give them a wide berth, take the money and put it elsewhere. If you're not in the UK, the you can't have an ISA - just now, any money that I don;t need in the short term, I'm putting into unit trusts - specifically those that invest in companies with large dividend returns...there's a risk, but that's me. If I had GBP7k that I didn't need rightnow, I could easily blow half of it on a good holiday. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted September 2, 2014 Share Posted September 2, 2014 Endowments, especially 'With-profits' are a pretty much discredited investment - generally poor performance with no transparency in fees/costs. Unless you are really happy and can see some guaranteed benefits, then continuing the policy would tie your money up with them for a longer period - can't see the point of that. Is there a penalty for just cashing in and taking the money and using/investing elsewhere? Or a benefit in reinvesting the money with them? I'm a little cynical, but if the company has already made their money from your investment and given you GBP7000 less than you expected, I'd be tempted to give them a wide berth, take the money and put it elsewhere. If you're not in the UK, the you can't have an ISA - just now, any money that I don;t need in the short term, I'm putting into unit trusts - specifically those that invest in companies with large dividend returns...there's a risk, but that's me. If I had GBP7k that I didn't need right now, I could easily blow half of it on a good holiday. Agree 100%. Cash it in based on the limited information. I am also doing the same with spare cash too btw (my endowment matured last June after 25 years as it happened) and have done for the past year. Returning over 10%pa but, as they say, past performance is no guarantee of ..........yada yada. Link to comment Share on other sites More sharing options...
Illawaralad Posted September 2, 2014 Share Posted September 2, 2014 Not being financially minded I'm looking for advice please on an endowment policy which will mature at the end of this month.I have been given 3 options, Cash it in, £7,000 less, but I expected worse Continue the policy Or cash it in and invest the money with them Any advice would be greatly appreciated. We have one whitch is maturing in 2016, we took it out on our first house but kept the policy going even when we switched to a repayment mortgage. We've been getting letters hinting that if we cash it in now we'll get pretty much the same as if we let it mature. Now I have a deep seated mis-trust of all people financial, afterall they're in the game because of the money they make for themselves not their clients. So I'm gonna let it mature and a) be very pleasantly surprised, and mis trust intact, or b) wind up with egg on my face, in either case no-one else will know about it Link to comment Share on other sites More sharing options...
Lindor Posted September 2, 2014 Author Share Posted September 2, 2014 I'm not sure if there are any benefits from reinvesting with them, I'm in the UK at the minute and the forms have been sent to Australia, the policy has matured at the end end of a 25 year term so there wouldn't be any penalties. I kept it going after I sold my flat 7 years ago and increased the payment from £33 to £50. I've been getting warnings for years, saying that I wouldn't get the amount expected at the start of the policy (£25,000) I don't even know why I continued it, I think I just thought it had been going for so long I might aswell just leave it, told you I wasn't financially minded! Thank you very much for your advice gentlemen, I will take the money and run! Link to comment Share on other sites More sharing options...
Gbye grey sky Posted September 2, 2014 Share Posted September 2, 2014 We have one whitch is maturing in 2016, we took it out on our first house but kept the policy going even when we switched to a repayment mortgage. We've been getting letters hinting that if we cash it in now we'll get pretty much the same as if we let it mature. Now I have a deep seated mis-trust of all people financial, afterall they're in the game because of the money they make for themselves not their clients. So I'm gonna let it mature and a) be very pleasantly surprised, and mis trust intact, or b) wind up with egg on my face, in either case no-one else will know about it I am surprised that you have been told that you will get the same if you cash it in now. Most 'with profit' endowments have a sizeable terminal bonus. I never had any such letters with mine and think you are right to be suspicious. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted September 2, 2014 Share Posted September 2, 2014 I'm not sure if there are any benefits from reinvesting with them, I'm in the UK at the minute and the forms have been sent to Australia, the policy has matured at the end end of a 25 year term so there wouldn't be any penalties.I kept it going after I sold my flat 7 years ago and increased the payment from £33 to £50. I've been getting warnings for years, saying that I wouldn't get the amount expected at the start of the policy (£25,000) I don't even know why I continued it, I think I just thought it had been going for so long I might aswell just leave it, told you I wasn't financially minded! Thank you very much for your advice gentlemen, I will take the money and run! I feel that you were probably right to keep it to the end if yours was anything like mine. I paid about £100 a month for 25 years. It was to pay off the original mortgage on my then flat of £62000 (plus a surplus lol). At one point with 7 years to go it looked like I would get around £42k but it ended up as £52k. If I had disposed of it with 7 years to go I would have lost out big time. Link to comment Share on other sites More sharing options...
Lindor Posted September 3, 2014 Author Share Posted September 3, 2014 Over the last few years I've been warned to expect anything between £13000 and £16000, so I'm fairly happy with £18! I did also get a couple of thousand a few years ago when I complained about not being warned of the risk of shortfall. I was told as single parent, I should have an endowment as the mortgage would be paid if I were to die blah blah blah, no mention that it might not! Link to comment Share on other sites More sharing options...
Keith and Linda Posted September 3, 2014 Share Posted September 3, 2014 Over the last few years I've been warned to expect anything between £13000 and £16000, so I'm fairly happy with £18! I did also get a couple of thousand a few years ago when I complained about not being warned of the risk of shortfall. I was told as single parent, I should have an endowment as the mortgage would be paid if I were to die blah blah blah, no mention that it might not! Thought life insurance was compulsory on any mortgage in the uk?. We kept our endowment going, matured a couple of years ago, would have fell short of the target by 6000 quid if I still had the mortgage, but hey for the 13 years here still paying it then 5 grand outlay gave me 20 grand payout, so happy enough. Link to comment Share on other sites More sharing options...
TerryDXB Posted September 3, 2014 Share Posted September 3, 2014 We have one whitch is maturing in 2016, we took it out on our first house but kept the policy going even when we switched to a repayment mortgage. We've been getting letters hinting that if we cash it in now we'll get pretty much the same as if we let it mature. Now I have a deep seated mis-trust of all people financial, afterall they're in the game because of the money they make for themselves not their clients. So I'm gonna let it mature and a) be very pleasantly surprised, and mis trust intact, or b) wind up with egg on my face, in either case no-one else will know about it GBBS is right - your final payoff will comprise the value of your fund AND a terminal bonus (a loyalty payment if you like), which can be a large amount (10%-30% of your fund value), but you have to let your policy mature in order to receive it. Technically I guess the info you have been given is correct - growth in 'with-profits' is pitiful and between now and the maturity date, there will be little increase in fund value, so the cash-in value in 2016 will be pretty much the same as its current cash-in value. But, cash-in now and you lose the terminal bonus. I'd ask the people giving you this advice if they have taken the terminal bonus into account when talking with you - if they haven't, then you should be a) extremely angry and b) take anything else they say with a pinch of salt. Link to comment Share on other sites More sharing options...
tonyman Posted September 3, 2014 Share Posted September 3, 2014 Lindor , maybe going slightly off topic but the worse thing I ever did in the uk was take out a private pension at the age of 21 ........paid so much for yrs only to find its hardly worth a bank .........I have kicked myself for many yrs wishing I had carried on ploughing money into endownments that I did have and were great when they came up ......all the pension money I fear is lost .......would loose too much to tax now ......hardly worth the time and effort ............for 26 yrs I have money sitting somewhere in the uk , not sure how much or how to get it and that Government put us on a bum steer in the late 80`s................ Link to comment Share on other sites More sharing options...
Lindor Posted September 3, 2014 Author Share Posted September 3, 2014 That's bad! One thing the bloke who sold me the endowment said to me and 2 of my friends, also nurses, was not to touch our NHS pensions. He said it was the best pension. Don't know if it was the best, and I wasn't going to touch it anyway but I retired at 55 and do have a decent pension. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted September 4, 2014 Share Posted September 4, 2014 Lindor , maybe going slightly off topic but the worse thing I ever did in the uk was take out a private pension at the age of 21 ........paid so much for yrs only to find its hardly worth a bank .........I have kicked myself for many yrs wishing I had carried on ploughing money into endownments that I did have and were great when they came up ......all the pension money I fear is lost .......would loose too much to tax now ......hardly worth the time and effort ............for 26 yrs I have money sitting somewhere in the uk , not sure how much or how to get it and that Government put us on a bum steer in the late 80`s................ If you can find paperwork on this you could look to transfer it via a QROP into your Aussie Super. Sure you will probably pay some tax on the increase in the value since you left the UK but surely better than not having any of the money. Link to comment Share on other sites More sharing options...
tonyman Posted September 4, 2014 Share Posted September 4, 2014 That's bad! One thing the bloke who sold me the endowment said to me and 2 of my friends, also nurses, was not to touch our NHS pensions. He said it was the best pension. Don't know if it was the best, and I wasn't going to touch it anyway but I retired at 55 and do have a decent pension. sorry to go off topic Lindor but i didn't have you down as 55 :shocked:..you looked stunning on the meet :yes: Link to comment Share on other sites More sharing options...
Lindor Posted September 4, 2014 Author Share Posted September 4, 2014 sorry to go off topic Lindor but i didn't have you down as 55 :shocked:..you looked stunning on the meet :yes: I'm a little bit older now but thank you Nick,you're very kind.........:cute: Link to comment Share on other sites More sharing options...
tonyman Posted September 4, 2014 Share Posted September 4, 2014 I'm a little bit older now but thank you Nick,you're very kind.........:cute: I'm serious ....your a fantastic advert ......as well as a lovely looking lady .......... Link to comment Share on other sites More sharing options...
Lindor Posted September 4, 2014 Author Share Posted September 4, 2014 Advert? Link to comment Share on other sites More sharing options...
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