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August 2003

Q & A: Endowments

Q: I was thinking of unloading my endowment policy. What are the issues surrounding this and how do I get the best deal?

A: Many investors are currently unhappy with the projected returns of their endowment policies and are considering alternative solutions to repay their mortgages and also for long term savings requirements. It is true to say that in the past three years most endowment companies have been hit hard by the poor performance of the investment markets and this has been passed on to investors by way of vastly reduced bonuses and in some cases no bonuses. There are numerous aspects you should consider when looking to "unload" an endowment prior to the end of term including; potential penalty imposed by the endowment company for early surrender, personal taxation and loss of life cover. However, there are a few companies now willing to purchase policies second hand and may offer you a higher figure than the endowment provider. Selling or surrendering an endowment can be a complex area and you should speak to a qualified financial planner for guidance.
Companies in the Acumen Group include Acumen Accountants and Advisors Limited, Acumen Financial Planning Limited and Acumen IT Consultancy Limited. Acumen Financial Planning Limited are authorised and regulated by the Financial Services Authority. Acumen Accountants and Advisors Limited are registered to carry out audit work and are regulated for a range of investment business activities by the Association of Chartered Certified Accountants but are not authorised and regulated by the Financial Services Authority. Acumen Financial Planning Limited, Registered in Scotland number 215343, VAT Number 894 6221 94. Acumen Accountants and Advisors Limited, Registered in Scotland number 153885, VAT Number 894 6221 94. Acumen IT Consultancy Limited, Registered in Scotland number 284749, VAT Number 859 474862. Acumen Holdings (Aberdeen) Limited, Registered in Scotland number 215503, VAT Number 894 6221 94. Registered office, Commercial House, 2 Rubislaw Terrace, Aberdeen, AB10 1XE.