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We have £29000 in a 25years endowment which has 10 years to run. we want to cash it in and make some money elsewhere.

johnpbatchelor
by johnpbatchelor 09 January 2009  |  Comments 2 comments  |  Love Love  0 loves

We'd like to know what to invest in as the prediction for the lower rate of 4% once the endowment ends will be £70000.No where near the £180000 we need to pay off the mortgage. The endowment co have said new rules from Jan 1st mean we have to convert the mortgage to repayment if we cash in the endowment. Any advice would be greatly appreciated.

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Comments (2)

  • MikeGG1
    Love rating 824
    MikeGG1 posted

    Have you had a quote yet from a secondary marketmaker for your policy? It will be higher than the insurance co quote and yet there will be a substantial element of profit left in the policy for the marketmaker. At 10 years to go, you have entered the region where it is better to stay with the policy. Any valuation will have ignored any Terminal Bonus which is likely to be substantial.

    Get a quotation from the Insurance co for maturity value assuming 75% of current reversionary and terminal bonuses and see how that compares with the £180k that you need and start investing 8% of the shortfall each year.

    You can each put up to £7,200 into ISAs, so I would suggest that is the best place for the extra investment and would also suggest 25% cash & 75% equities.

    I am assuming a period of higher inflation once the current market turmoil is over.

    Posted on 09 January 2009 | Love Love  0 loves Report
  • elsiemary
    Love rating 5
    elsiemary posted

    my endowment matures next week. do i have to accept the maturity value? the original projected value was £22,000. the maturity value now offered is £21,134 [including reversionary and terminal bonus]

    Posted on 12 January 2010 | Love Love  0 loves Report

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