Surrendering my endowment policy to pay off IVA early

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cuffy000
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by cuffy000 » Sun Jun 11, 2017 12:30 pm
Hi, I am 30 months into my IVA and I am thinking about surrendering my endowment policy to pay it off early. Does anyone know how much I would be expecedt to offer? I pay £127 per month and have 30 months left to go. I don't know if it's a good idea or not. I just want it paid off and don't want to face remortgaging after the 5 years as I have a fair bit of equity. I am aware it will still stay on my credit score for the whole 6 years.
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Foggy
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by Foggy » Sun Jun 11, 2017 1:13 pm
As equity will have to be addressed you are looking at making a further 42 payments at £127 (currently). So £5334. Allowing for savings they will make in administration over the next few years I would say an offer in the region of £4,000 to £4,500. Tempting as it may be to go for the lower figure, a higher offer is more likely to be accepted. ( have seen, however, low offers accepted as well as high ones refused.

Do not draw anything down until the offer is accepted, otherwise it will be regarded as a windfall and taken into the IVA anyway.

Only you can weigh up the short term gain versus the long term loss on the endowment.
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kallis3
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by kallis3 » Sun Jun 11, 2017 4:11 pm
I agree - work out your figures before making an offer.
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Michael Peoples
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by Michael Peoples » Mon Jun 12, 2017 8:41 am
Cashing in an endowment seems a but drastic as this money should be used to repay the mortgage. If you are interest only you will need to start repaying the capital and if you are already repayment I do not know why you were able to keep the endowment policy. Bear in mind too that many policies pay bonuses if they run their term so it may not be the best idea to surrender the policy. Borrowing the funds for a settlement or even obtaining a small secured loan could be better options than endowment surrender so speak to a financial adviser.
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Lisa Thomas
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by Lisa Thomas » Mon Jun 12, 2017 8:48 am
If you decide to go ahead with this an offer of c£4.5-£5k would seem attractive to me.
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