If your statement shows your with-profits policy isn’t worth what you expected – or you need to access your cash before the term is up – you might be thinking of cashing in your policy early or even selling it. Here are some things to consider when deciding what to do. Make sure you understand the implications of ending your policy – fees, charges or reduced payouts – for whichever choice you make. Talk to your provider about the cost and effect on payouts of ending your policy early.
Key Takeaways:
- If £41,000 genuinely is the cash-in value of your endowment – rather than the amount guaranteed to be paid on your death – cashing it in would seem to be a reasonable option.
- Even if the interest rate on your mortgage jumped to 5%, you would still save £81 a month (a total of £5,832 over six years).
- you would be better off leaving the mortgage amount at £6,000 because even the most competitive personal loan is going to be more expensive
“You can get an even better deal by using the monthly savings to make overpayments on the small remaining mortgage, paid off in full in less than three years’ time.”