Endowments? Did anyone have one? And what did they do with it?

[nkf]

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?

Pension I guess.

Our IFA advised us
A) Surrender and pay off a lump sum of mortgage or
B) Surrender and put it into an ISA/High interest account and keep the payments going into that instead or
C) Do nothing

Saltire - those are the options? What did he recommend?

Those were the three main options he gave us. We went away and thought about it, and decided that for us the best option was A. As I said earlier though, switching to a repayment mortgage didn't affect us too much financially, so it was an option we could do. have you spoken to anyone?

Yes. Every so often I talk to someone about it. But I'm never very convinced by the answers. I am sure I should get rid of it. But whether I surrender, freeze or sell it, I'm not sure. And if I cash it in, what should I do with the money?
Thanks for all your suggestions.

It's a difficult one.

About 3 years ago I cashed ours in and paid off the mortgage. It was worth £48k and our mortgage was £60k but we cashed in some shares to make up the shortfall.

Although it only had 5 years to run, it was forecast EITHER to fall short of £60k OR to be worth around £78k (don't ask!).

Even the best case scenario of £78k would still have meant 5 more years of mortgage payments and endowment instalments and by putting those would-be payments into ISAs I think we're quids in.

Sorry, I know this doesn't help you!

Our pensions are with-profits investments and are crap but now we are in our 50s I'm wary of moving them. That was bad investment advice from someone in the 80s and we were never savvy enough to do anything about it.

Hello...I am a Mortgage Adviser who in a past life actually worked as a consultant for banks dealing with endowment related complaints and compensations.

Basically Advisers like to cover their bums so that is why you wont get a straight answer from them. Also many of their suggestions ie cancel and pay into pension or savings investment vehicle are suggested as then they will get commission from what you set up whereas if you pay it off your mortgage they will get nothing.

Basically the only ones that are worth while are generally at least 20 years old and even then probably are not. It is the old fashioned guaranteed 100% with profits policies that were worth it and these are the ones that can be sold on the endowment market. However these ones are also very expensive to run and tend to be the types our mums and dads would have had not the rest of us. Most are invested in either with profits funds or unit linked funds and these ones are not guaranteed and generally seem to be losing money.

The bottom line is 99% of the time you are always better off stopping paying into it and cashing it in as it is such an expensive way to invest and your monthly premiums could just keep losing money so in effect you are throwing good money after bad. The only time it isnt worth it is if you desperately need the life cover...for example if you took it out when health was good and in teh meantime you got cancer or something and now cant get life cover and need it for your kids. Even then though you could make the policy 'paid up'; which would mean you stop making monthly payments and then the cost of life cover just gets deducted from the balance.

I always advise everyone (purely from what I know in my past career) off the record of course to cash it in and then pay it off their mortgage when they are due to remortgage next. I also write complaint letters for everyone to see if they can get some compensation back to cover their losses (another thing worth knowing is the compensation letters depend purely on how they are worded).

Good luck everyone...it is something I feel quite strongly about having witnessed thousands of people that were greatly affected as a result of being lied to by people they trusted.

If anyone wants a hand with complaint letters I would be happy to help ....just promise me you will come to me when you need to remortgage or reduce your life premiums in return for the endowment complaint advice. Email me on [email protected] anytime

Kind Regards
Ceri