Could selling my endowment help me enjoy a better retirement?

Publication date | 25/11/2009

A number of Britons do not feel they have enough cash saved to enjoy their retirement and, as such, 35 per cent claim they are currently looking for alternative ways to boost their household income.

The survey for Aviva found that almost a quarter have had to rein in their outgoings in order to start saving money, but this could include interest repayments on unsecured loans and credit cards.

Lowering the amount paid back monthly towards such unsecured financial commitments could, however, result in higher interest repayments in the long term as balances continue to climb.

Chris Radford, chief executive officer of aap - the UK's biggest buyer of endowment policies - said some of its customers who had big plans for retirement - such as frequent flights to a holiday home or a new car - had decided to sell their underperforming endowment policies to help raise the cash to clear their current debt.

The Aviva poll also discovered that 26 per cent of Britons are worried about their future finances, while one in three cite the rising cost of living as their biggest concern.

Commenting on the findings, Brian Bussell, director of pensions at Aviva, said: "Understandably, the recession has forced people to think about their retirement income and many have realised that they may not have sufficient funds to live through their final years in the comfort they have grown accustomed to.

"We would encourage people to make use of their full range of assets, including investments, state benefits, pensions and property, to make sure that they aren't effectively cheating themselves out of the lifestyle they could enjoy," he added.

In order for people to enjoy the retirement lifestyle they had planned, many may want to find alternative funds to help them achieve their goals.

Mr Radford, from aap, said some of its customers had decided to sell their unwanted endowment policies to make headway into paying back unsecured credit, leaving more cash for them to enjoy other things.

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