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    Mortgages are loans which are intended to help buyers purchase residential property. When you take out a loan, the lender charges...Read More

    You can protect yourself and your family financially by making money available, should something unexpected happen. Read More

    If you're over the age of 55, equity release offers you a way to use the value of your home to raise money. It is... Read More

    This is an area of financial planning that is often overlooked. Traditionally, we have our buildings and contents insurance with our mortgage lenders, which may be uncompetitive in a very competitive marketplace. Read More

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Home    Endowment
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Endowment

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

THE VALUE OF THE INVESTMENT CAN GO DOWN AS WELL AS UP AND YOU MAY NOT GET BACK AS MUCH AS YOU PUT IN.

How does it work?

You make two payments per month. One to the lender to repay the interest on the amount borrowed, the other to an insurance company for an endowment contract. There are mainly two types of endowment: unit linked or with profits. Both invest in a broad range of assets including stocks and shares. The capital in the endowment aims to build up over the term of the mortgage to repay the outstanding capital, although to achieve this the investment performance needs to be sufficient to build up the required capital and this performance cannot be guaranteed.

ADVANTAGES:

This type of repayment vehicle is flexible since:

  1. You can take the endowment policy with you if you move home or change mortgage lender.
  2. Endowments usually include some kind of life cover and some also include critical illness cover.
  3. If the endowment contract performs well, you may accumulate more funds than required to repay the loan.

DISADVANTAGES:

  1. Endowments are not risk free as there is investment in the stock market.
  2. There is a possibility your fund may not have built up sufficiently to repay the capital.
  3. You must keep a watchful eye on your fund's performance to help prevent this happening.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

THE VALUE OF THE INVESTMENT CAN GO DOWN AS WELL AS UP AND YOU MAY NOT GET BACK AS MUCH AS YOU PUT IN.

How does it work?

You make two payments per month. One to the lender to repay the interest on the amount borrowed, the other to an insurance company for an endowment contract. There are mainly two types of endowment: unit linked or with profits. Both invest in a broad range of assets including stocks and shares. The capital in the endowment aims to build up over the term of the mortgage to repay the outstanding capital, although to achieve this the investment performance needs to be sufficient to build up the required capital and this performance cannot be guaranteed.

ADVANTAGES:

This type of repayment vehicle is flexible since:

  1. You can take the endowment policy with you if you move home or change mortgage lender.
  2. Endowments usually include some kind of life cover and some also include critical illness cover.
  3. If the endowment contract performs well, you may accumulate more funds than required to repay the loan.

DISADVANTAGES:

  1. Endowments are not risk free as there is investment in the stock market.
  2. There is a possibility your fund may not have built up sufficiently to repay the capital.
  3. You must keep a watchful eye on your fund's performance to help prevent this happening.

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Miller Financial Planning Ltd
Eastlands Court Business Centre
St Peters Road
Rugby
Warwickshire
CV21 3QP
T: 01788 577775
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Privacy Notice

Miller Financial Planning Ltd is an appointed representative of Quilter Financial Planning Solutions Limited, which is authorised and regulated by the Financial Conduct Authority. Registered as a limited company in England & Wales No:06752854.  Registered Office: Eastlands Court Business Centre,St. Peters Road, Rugby, Warwickshire, CV21 3QP.

The Financial Conduct Authority does not regulate advice on commercial and agricultural mortgages, some buy to let mortgages, or advice on some tax matters.

The information and content within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Approver Quilter Financial Planning Solutions Limited 10/06/2024.

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