Could endowment policy cash help lower debt risk?

Publication date | 14/07/2010

The full effects of the recession may not have been felt yet and consumers could see increases in the risks of entering into debt.

Consumers who find themselves struggling in this way may benefit from surrendering endowment policies to provide them with more money.

According to David Rodger, managing director of the Debt Advice Foundation, there is likely to be a rise in the number of individuals struggling with their levels of credit over coming years.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers who thought they were at risk of debt problems had decided to sell their underperforming endowment policies.

Are your debts under control?

Mr Rodger noted that for many people, the reality of debt problems does not hit home until they are at crisis point.

He added: "The downturn in the economy has certainly had a big impact on households across the country and with redundancy and loss of working hours having become more prevalent, people are finding it increasingly difficult to manage their debts."

The expert went on to note that such problems can impact on all areas of a person's life, including relationships, work performance and health and wellbeing.

Those keen to avoid these issues may want to sell an endowment policy to provide them with a financial cushion.

Mr Rodger made his remarks following the release of figures from moneysupermarket.com, which showed that the total level of personal debt in Britain stands at over £1,460 billion.

Selling endowments could help consumers avoid debt

Mr Radford, from aap, said some of its customers who were having money troubles had decided to sell an endowment policy so they could avoid entering into more debt.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

Reasons to sell your endowment policy