Endowment policy cash could cover holiday home costs

Publication date | 26/02/2010

Britons who have a holiday home may feel like they are not able to fly out to it as frequently as they would like to because of the impact of the economic downturn.

Financial commitments at home which have been exacerbated by the recession may have meant that families have not been able to go on holiday as often as they would like to - or maybe not even at all.

However, with a significant investment made in an overseas property, many Britons will want to make sure they are getting the most out of it.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers had decided to sell their underachieving endowment policies in order to raise the cash required for regular trips to their holiday home.

Going abroad is important for families

A new survey from Santander Cards has revealed that people who refuse to give up their getaway are undertaking a number of tactics to make their money go further.

Nearly half of the 25 million adults who went on holiday last year booked their travel arrangements or accommodation online or directly made their booking, avoiding tour operators and travel agents.

This resulted in an average saving of £425. A further six million people asked for a free upgrade.

Taking regular trips to a holiday home may prove expensive. The poll found that holidaymakers believe the average amount of money they spend on their getaways is £1,315 over the year.

Some people may use credit cards or personal loans to cover their family break. However, rather than rely on such financial methods, some people could decide to sell their endowment policy to raise the money this way.

"It's not surprising that in the current economic climate, holidaymakers are increasingly looking for value and are prepared to do the homework themselves in order to get the best deal. It's very much a sign of the times too that Britons are no longer shy about asking for an upgrade," said Emma Roberts, director of Santander Cards.

selling your endowment policy to cover the cost of a holiday home

Mr Radford, from aap, said some of its customers with holiday homes had decided to sell their unwanted endowment policies in order to raise the money required to cover frequent trips abroad for the whole family.

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