Endowment due.

[croyde]

This summer it will have been 25 years since I took out an endowment for a mortgage on a flat I no longer have.

The old story, we were young and some sleeze in a suit sold us the idea that this method of mortgaging would pay off the loan and leave enough over for a speedboat. Actually his words and they still ring around my head as if it was yesterday

Well we all now know that it was never going to work like this but it does amaze me that even during a period that you just could not lose on share dealing and whatnot, the company seems to have pissed all the money up the wall.

A quick calculation shows that by the summer I will have paid in £23,760 and the figure expected is £30k. Good job I still don't have that £50k mortgage.

Now considering this is money paid in monthly, not a lump sum invested back in '88. How bad a return is this?

My flatmate relinquished his part of the endowment after 10 years so he could move out and this was all done at the solicitors and it does mean that I will have only invested a total of £19,800.

Bit of man maths there

Cheers.

[Sarnie]

I seen people who have realised a lot less than they actually put in, so your outcome doesn't seem that bad in my eyes!

Well, not if you were going to have to find an extra £20k to pay the mortgage off!!

[croyde]

Good point at least there is a profit and if you takeaway my mate's contribution it is actually 50%.

Poor sods who get less than they put in

[Newc]

Something around 1.5%ish p.a. on your description of the cashflows.





Before inflation.

[croyde]

Newc said:

Something around 1.5%ish p.a. on your description of the cashflows.





Before inflation.

Putting it that way

[Jockman]

Does your figure include the Terminal Bonus ??

Have you included your pay out from your mis-selling claim ??

[croyde]

No terminal bonus. I did ask about that yesterday

Did go the miss-selling route a few years back but as the chap was an independent, I was told that I had no comeback.

In other news, I have managed to claim back my PPI off my credit card without using a middleman. We settled an amount a few days ago.

[GT03ROB]

croyde said:

A quick calculation shows that by the summer I will have paid in £23,760 and the figure expected is £30k. Good job I still don't have that £50k mortgage.

Now considering this is money paid in monthly, not a lump sum invested back in '88. How bad a return is this?

It's crap. I had an endowment mature in September, it too was 25yrs. Contributions were £27k, planned redemption value was £55k, actual was £55,045.

Guess I got lucky compared to some!

[Deva Link]

I don't know how big a proportion it takes up, but don't forget the endowment premiums normally included joint life assurance for the full value of the loan, so if you hadn't had the endowmnent you'd have had to buy that separately.

[croyde]

Deva Link said:

I don't know how big a proportion it takes up, but don't forget the endowment premiums normally included joint life assurance for the full value of the loan, so if you hadn't had the endowmnent you'd have had to buy that separately.

True, it pays out £50k on death in a speedboat related incident

[croyde]

GT03ROB said:

It's crap. I had an endowment mature in September, it too was 25yrs. Contributions were £27k, planned redemption value was £55k, actual was £55,045.

Guess I got lucky compared to some!

Double your money, that's good. I had a PEP bought in the mid 90s that had doubled by 2000 but many advised that it should be for the long term and that I should leave it alone if I could afford it.

The value quickly tumbled after 2000 back to what I paid for it. It's now back to double after nearly 18 years.

[Elderly]

croyde said:

No terminal bonus. I did ask about that yesterday

Dare I ask which company it's with?

I keep an endowment going just out of curiosity to see what happens in the end
and the life cover might have come in useful.

I was persuaded to take out a 25 year £60K policy in 1989.

I will have paid in a little over £30K and the minimum payout will be about
£31K plus HOPEFULLY a terminal bonus too .

Just after I took it out, I wrote to them saying that I didn't think that it
was a good idea as I saw the possibility of it all going pear shaped.
They replied that projections showed otherwise.

Fast forward to 2004 and I succesfully did them for mis-selling
and received a cheque for about £20K ...... and to add insult to their slight injury I requested
that I kept their endowment policy going.

[Deva Link]

Elderly said:

Just after I took it out, I wrote to them saying that I didn't think that it
was a good idea as I saw the possibility of it all going pear shaped.
They replied that projections showed otherwise.

When there were the first murmurings of problems with endowments in the mid-90's I called the company who had mine, Clerical Medical, and the person I spoke to literally laughed out load at the suggestion that the policy might not meet its target amount (£30K).

It was that conversation that persuaded me to go through the mis-selling process and I got a cheque for £4K.

[Deva Link]

Elderly said:

...the life cover might have come in useful.

I was persuaded to take out a 25 year £60K policy in 1989.

I will have paid in a little over £30K and the minimum payout will be about
£31K plus HOPEFULLY a terminal bonus too .

....

Fast forward to 2004 and I succesfully did them for mis-selling
and received a cheque for about £20K ......

Your return seems very poor which is perhaps why your mis-selling payment was so high (I've never heard of one of that scale before).

Mine was for £30K, joint lives, taken out in late 1986, and it was £39/mth.

So I paid about £12K, and got about £20K back, plus £4K for mis-selling.

[Nigel H]

Mine is due in June, 25 years with Legal and General. Just done a quick calc, I've paid in about £17k and payout estimate including terminal bouns circa £32k, so that doesn't look too bad, given that I've also had life cover. This was for a £30k policy

[anonymous-user]

Elderly said:

croyde said:

No terminal bonus. I did ask about that yesterday

Dare I ask which company it's with?

Does it not depend on the type of endowment rather than the company. Traditional old style "With profits" endowments would normally get a terminal bonus, unit linked endowments don't as they are linked directly to invested funds. Don't take that as gospel just trying to remember back to the early 90s when I had to do a BTEC with an Insurance module

[Deva Link]

Bluequay said:

Does it not depend on the type of endowment rather than the company. Traditional old style "With profits" endowments would normally get a terminal bonus, unit linked endowments don't as they are linked directly to invested funds. Don't take that as gospel just trying to remember back to the early 90s when I had to do a BTEC with an Insurance module

I can't remember the different types but ours was specifically a "low-cost endowment", and I do remember being told that we shoudn't expect a significant excess at the end, it was only intended to produce the target anount (and in reality it somewhat undershot that).

[Nigel H]

Bluequay said:

Elderly said:

croyde said:

No terminal bonus. I did ask about that yesterday

Dare I ask which company it's with?

Does it not depend on the type of endowment rather than the company. Traditional old style "With profits" endowments would normally get a terminal bonus, unit linked endowments don't as they are linked directly to invested funds. Don't take that as gospel just trying to remember back to the early 90s when I had to do a BTEC with an Insurance module

Rings true. I had 2 of the blighters and the L&G one is a with profits. I sold up my other unit linked policy early a few years ago as I could, with no penalty. The one with profits with L&G I've had to stay with until the end to get the bonus.

[CDP]

I received a letter about the revenue wanting to tax endowment policies on mortgages. Has anybody else heard about this? It would completely destroy any hopes of paying mine off (which is currently on track for a surplus).

[croyde]

Elderly said:

Dare I ask which company it's with?

I keep an endowment going just out of curiosity to see what happens in the end
and the life cover might have come in useful.

I was persuaded to take out a 25 year £60K policy in 1989.

I will have paid in a little over £30K and the minimum payout will be about
£31K plus HOPEFULLY a terminal bonus too .

Just after I took it out, I wrote to them saying that I didn't think that it
was a good idea as I saw the possibility of it all going pear shaped.
They replied that projections showed otherwise.

Fast forward to 2004 and I succesfully did them for mis-selling
and received a cheque for about £20K ...... and to add insult to their slight injury I requested
that I kept their endowment policy going.

It's now with Phoenix althoiugh it did start out as Brittania Life then Old Mutual or the other way round.

Have I been fobbed off about being mis sold the policy by an IFA hence no comeback even though it's with a known name company?