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A new survey has highlighted the dramatic shortfall in with-profits endowment policy payouts. With around 80% of endowments unlikely to pay off mortgages, this has led to many considering surrendering or selling endowment policies.

The average payout on a with-profits endowment policy has declined, forcing many people to consider surrendering or selling their endowment policies, according to a new Money Management survey.

The survey shows that over a period of 25 years, the average policy has only achieved an 8% return, compared with a return of 9.6% from the UK All Companies sector.

Responding to the survey, Andy Mossack, Marketing Director of the UK’s largest endowment policy buyer aap comments on the increase in enquiries showing customer concern:

"Yet again we are seeing average payouts on with-profit endowment policies fall. On the back of surveys, such as Money Management, and also poorly received bonus announcements from life companies themselves, we are seeing an increase in enquiries made by people looking at reviewing their endowment investments.

"Over a period of ten years, investors are only marginally better off than if their money was held in an instant access account, which is a low-risk investment giving investors instant access to their funds.

"It is therefore no surprise that eight in ten endowment policies in force are unlikely to pay off the full mortgage they were taken out to cover – and with around eight million mortgage endowment policies in the UK, that’s around 6.4 million policies falling short.*

"Many people, disheartened by poorly performing funds, may be considering reviewing their endowment investments and might look at either surrendering their policy or selling it on.

"Any policyholder thinking of surrendering their policy, but deterred by very poor surrender values, should not forget that they can sell their policy in the secondary market through an endowment policy buyer such as aap and potentially gain considerably more than its surrender value."

* Source: ABI September 2006

For more details please contact Andy Mossack, Marketing Director.
Phone: 020 8282 8072

ABOUT aap:
aap was established in 1968 and is the UK’s oldest and largest specialist in the buying and selling of endowment policies. The Company has been involved in the purchase of over £1 billion of with-profit endowments.
aap is authorised and regulated by the FSA and is a member of the Association of Policy Market Makers (APMM).
To learn more about aap go to:

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