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When something seems too good to be true it usually is, so....
29 years ago I took out an endowment mortgage when I bought my first house, and as we've moved around, just kept it going as a savings plan.
Obviously there's been the whole endowment misselling scandal, and for the last 15 years the forecast has suggested that when it matured it would be worth maybe 10% more than we've paid in, so half the original mortgage. Just had what will be the last forecast through and suddenly they are forecasting it to equal or even exceed the original mortgage.
I'm just a bit surprised - given the current econimic uncertainty - that there's this sudden potential boost to the value, and wondered if anyone had seen something similar. I'm also trying to reign in my anticipatory bike upgrades....
I am not a financial adviser but from what I recall they make most of their money in the last few years as that is when the most money is being invested but are dependent on how the stock market/where they are invested is performing in those last few years.Long term projections are therefore little more than guesstimates based on averages. Cashing them early usually means you lose out.I was lucky I cashed mine in early in 2008 and did alright..if I'd waited a few more months it would have been a different story.Might be worth checking with a professional whether to cash it now or wait till full term before Brexit impacts....
My wife's matures this Friday. It could be Bingo or Bollocks. Will keep you posted.
If any of it has been invested abroad, you might well be reaping the benefits of a really crap exchange rate right now
https://www.macrotrends.net/2549/pound-dollar-exchange-rate-historical-chart
I have one maturing next year which is doing ok. I had a small payout due to miss selling and if I add that to the endowment I get a little more than expected. Bonus is we switched to a repayment mortgage when we could afford it so this money will just be invested for our pension.
@nick2962 - that would make sense.
Luckily we are mortgage free already. There's a long list of things we can use it for though.
When we weren't expecting much from it, MrsMC suggested I keep the whole payout as my lifetime bike fund - the endowment predates her/us by 10 years. I made lots of appropriate "what's mine is yours" comments. I haven't shown her this latest forecast though.
Had one mature last year. Paid in c£26k and it paid out just under £55k. As noted above, it’s the last few years that can see a big increase.
HTS- if your wife’s one matures Fri, she should have had paperwork confirming the maturity with a pretty close estimate and where she’d like payment by now.
I had been getting updates for years about it not hitting the original target.
I'm mortgage free,I swapped to a repayment mortgage years ago & overpaid but kept the endowment going.
The endowment matured in March,I'd have been happy to just get my money back,however despite the shortfall warnings it hit the target.
Now I've got to decide what to invest it in before the £ drops through the floor...
@fb-atb - halve the numbers and that's roughly where we'll be.
I did the same as you, and mine matured last month. I took the endowment out 25 years ago, to give me a lump sum to pay off my interest only mortgage that I had at the time, and the final sum paid to me was 84% of that value.
Hope that is of some use.
Interesting mine matures in December after 25 years. Hopefully the shortfall isn’t as bad as I feared. I have a mortgage to pay off and anticipated a £20k defecit. If it’s less than that I may go to Las Vegas and blow the savings I had earmarked to pay off the mortgage. My endowment is with Scottish Widows.
My last endowment was with Standard life and ended up paying out £10k less than the original mortgage it was linked to.
Unfortunately I've still got 3 years left to wait on my 25-year endowment, last letter I had it was due to realise £28k instead of the £45k it was set up for. Hoping it gets a bit better in the remaining few years but probably as much chance of Brexit causing it to be worth £5k. I switched to a repayment mortgage a couple of years ago so its more just to help pay that down + new kitchen rather than ending up in a complete financial mess