And why is it so difficult to get any decent advice about them? I've asked various advisors what I should do with mine and they all shake their heads and say "they weren't a good buy?" but when it come to advice, nada.
The choices are:
i) cash in and pay into pension ii) cash in and pay into some other kind of saving vehicle. iii) put head in sand for another five years until it matures. But then what?
We have just cashed ours in and used £10,000 to reduce mortgage. it was an endowment mortgage we ahd, we've ahd huge problems getting any sort of "forecast" about how much the shortfall is/was going to be.
We're lucky, our payments for switching to a repayment didn't go up that much, from £186 to £224. We have beent trying to get compensation but it's a struggle, not helped any by the company Prudential having their call centre and custmoer service staff based in india. They struggle to understand me and I struggle to understand them, calls to ask 1 simple question can take up to 45 mintues!
It costs about £60 a month. And the last time I checked the surrender value was around £25k. It will deliver just over £40k in five years time (perhaps). It has a life assurance element but I could probably get that cheaper.
Basically, I'm about to start a job with a decent pension scheme and I wondered if I should cash in the endowment and buy as many extra years as possible.
Apparently a unit linked endowment has no resale value at all. The lovely man from the FSA did explain it too me. So not only were we facing a £10,000 shortfall, we couldn't get rid of the bloody thing
Our mortgage was part endownment part interest only. There was going to be a shortfall, so we cashed it in and changed the mortgage. My friend changed her mortgage but has kept her endownment as a savings.
We've still got ours, but have changed to repayment mortgage. I asked an IFA what to do, and he suggested making them "paid up", which means that you don't pay any more into them, but you don't cash it in until the original date.
However, I didn't get round to doing this, so I'm still paying in, hoping that in 8 years I'll at least get back enough to cover my payments. I'll then pay off a chunk of mortgage.
It's rubbish - I'd have been better sticking the money in a box under the bed.