Endowments - to cash in or not

**BlasterBates** · 24 September 2008, 08:20

Historic. You're right they're barely worth having. I read an article by an ex City trader. Basically when the market goes down they book the losses to the pension/insurance fund and when it goes up they take the profits. This means everytime the market goes down your money disappears. I've noticed that when the market recovers they don't send you a letter to explain that the losses have now been offset and you'll get the original amount promised. You just get regular downgrades after every market dip.

**Lockhouse** · 24 September 2008, 09:19

Originally posted by scott_free View Post

Hi

I have a with-profits endowment maturing in 2015, the performance has been crap so considering cashing it in, using the cash in an offset mortgage instead.

Had a few quotes from companies who buy them and they seem to be £800+ above that offered by the company - I'll take a hit on the accrued bonuses which roughly equate to the amount I need to pay in until 2015.

With these type of investments is their also a terminal bonus paid at the end, why is their a market for these when the performance seems so bad

Thanks

Same for me. Mine are up in 2013 and 2014. I'm thinking of cashing them in and making lump sum repayments on my mortgage. They were originally supposed to be worth 125K, now it's 70K if I'm lucky. When I can be bothered I'll sit down and work it out whether it's worth it retaining them against interest saved now.

**Cyberman** · 24 September 2008, 09:47

I cashed mine in a few years ago because of poor performance. Having had an offset mortgage since February, which is saving me 500 quid a month approx. I would say that your idea of putting that cash to that use will be far better, especially the way that interest rates are at the moment.

**Charles Foster Kane** · 24 September 2008, 10:54

Chicks dig my endowment, I cash in on it all the time.

**al_cam** · 24 September 2008, 11:51

I've been thinking of doing the same with mine.

Mine has a guarantee on the minumum return I get, but it is still carp. I haven't made the jump yet as I haven't worked out the cost of replacing the life/critical illness insurance I get with the endowment (which I would have to purchase separately if I cashed in) something you may also have to consider?

I've also been thinking - what if my endowment provider goes under? Have I any protection or will I lose the lot? I think I would rather be in control of things so will probably cash it in and offset it.

As for the terminal bonus question - I'm of the opinion that I would rather have something concrete today than a possibility of something bigger tomorrow, particularly in the current climate.

**Gonzo** · 24 September 2008, 17:53

Originally posted by scott_free View Post

With these type of investments is their also a terminal bonus paid at the end, why is their a market for these when the performance seems so bad

Thanks

The buyer will make more out of them by holding them to maturity than you will get by cashing them in now with the provider.

But I agree, the pricing of these things is so opaque that they have always made me run a mile. I can't understand why anyone would have one.

Oh hang on a minute, these are the things that the nice man from the Pru used to go around people's houses and sell them, then return collecting tuppence a week contributions for years afterwards. I am glad the world has moved on a bit and these are memories of a bygone age.

**scott_free** · 24 September 2008, 19:00

read today that these types of funds (bonuses) are often raided by the fund manager co(pensions/endowments) to prop up other types of investments that are much closely tracked by punters

and the gov. encourage us to invest in pensions, etc

I think I'll take my money and run

Endowments - to cash in or not