Royal London Life Assurance Endowment Policy

A

aidank

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Back in 1998 I began paying into a 30year Royal Liver Endowment Policy.

I have been paying €1025.95euro into this policy annually.

Thus i have paid €25,394 since 1998 and from the statement it is now worth €48,714.

I remember at the time I was told to expect i could return 4 times my investment over the 30years. Its not going to return even close to that.

Fees appear to be 871 per annum or 871/48714, which is 1.8%.


What questions should i be doing to decide whether i should keep paying this ? or cash it and invest it in a 3% Raisin account.



Its an endowment policy, will I have to pay tax on the gains should I decide to cash it in.
 

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There'll be no tax to pay, as it's already deducted from within the fund.

As for whether to stick with it, or go to raisin, it's a matter of certainty Vs potential. With raisin you know you'll get 3% less 33% tax. Sticking with the endowment you'll get at least €41,830 or potentially more depending on how the underlying investments perform.
 
How would I compare it to any other investment and see if it has been a good investment over the last 25years

Have a nephew just arrived and would like to start something with the intent of passing it on
 
You'd really just have to compare it on a like-for-like basis.

Standard Life 25 year savings endowment 2.73% annualised return to 2023.

Can't find the Aviva one at the moment.



If a (reasonably good) managed fund had an AMC of circa 1.8% pa over last 25 years I'd say it might have done circa 4.8% pa.

But the managed fund isn't a fair comparison. It'd be more in the cautiously managed fund style and that would probably be circa 1.5% less pa than the 4.8%.
 
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your not far off on those figures at all, i make it to have generated 3.3% on average over the last 25years.

Is there a low risk fund on offer which has low fees compared to the 1.8% im currently paying.
 
It probably wasn't unusual in 1998 for With Profit policies over 25/30 years to have maturity returns that translated to 8/9/10% pa.

You're probably ahead of average deposit rates (& inflation?) for last 25 years. At this stage (with 5 years to go to maturity) I'd probably just stick with it.
 
A by the way is, you also had the benefit of them paying out over 33000 + if you had died on day 1 or on any day since you took out the policy.
 
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