Endowment policy cash may help over-50s deal with financial strain

Publication date | 15/07/2010

Many consumers are experiencing financial strain as a result of the economic problems that remain in the UK.

The over-50s are not exempt from this, meaning they may benefit from surrendering endowment policies in order to reduce the pressure.

According to new research from LV=, more than one-in-three such individuals are pinning their hopes on an economic recovery.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers who were struggling to make ends meet had decided to sell their underperforming endowment policies.

Are your finances too stretched?

LV= also found that 64 per cent of those within five years of retirement are more concerned about their finances than they were a year ago.

In addition, pension savings have been reduced by a collective total of £18 billion during this period, the firm claimed.

It was revealed that a fifth of those coming up to the end of their working lives had decreased their retirement savings by an average of £324 per month.

Those who are unable to make sufficient savings may benefit from surrendering endowment policies in order to provide them with additional money.

Responding to the statistics, head of pensions at LV= Ray Chinn said: "Britain's over-50s have already seen their pension pots damaged by the economic crisis and now many appear to be diverting still more money away from retirement saving to deal with immediate pressures."

There are fears that money worries felt by consumers could get worse as austerity measures implemented by the new government begin to take effect.

Selling endowments could help improve finances

Mr Radford, from aap, said some of its customers who were struggling to cope with the current economic conditions had decided to sell an endowment policy to generate additional money.

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