CASHPOINT: MONEYBOX.Shortfall risk Shortfall risk The risk of falling short of any investment target. I READ that endowment mortgages are no longer considered a good idea. I took one out two years ago and wonder how easy it would be to change to a repayment mortgage A repayment mortgage is a term generally used in the UK to describe a mortgage in which the monthly repayments consist of repaying the capital amount borrowed as well as the accrued interest. . The policy is worth only pounds 140. IF you move house or remortgage A remortgage (also known as refinancing) is the process of paying off one mortgage with the proceeds from a new mortgage using the same property as security. The term is mainly used commercially in the United Kingdom, though what it describes is not uniquely British. in the next few years, your endowment policy endowment policy n → póliza dotal endowment policy n → assurance f à capital différé endowment policy n will give you flexibility and could be cost- efficient. Endowments are long-term savings plans and you have to let the contract do what it was set up to do - run its full term and build up bonuses. The policy will then mature and repay the loan when required. Some borrowers were badly advised in the past and quoted unrealistic growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , which means there is the danger of a shortfall. Legislation in place now ensures best advice is given in all instances. Slow growth THE pounds 10,000 I invested in a managed bond 10 years ago has grown to pounds 18,000. I will retire in a few months. Can I get income from my investment? YOUR overall return is slightly less than 8% per annum Per annum Yearly. - below average for a managed bond. If there are no encashment En`cash´ment n. 1. (Eng. Banking) The payment in cash of a note, draft, etc. penalties you should consider moving your money to another investment. You can withdraw 5% of your initial investment, which would be pounds 41.66 a month. However, changing to another provider would allow you to withdraw pounds 75 a month (5% of pounds 18K). Take advice because there may be tax implications. Check it out WHILE self-employed for 10 years, I have paid to a personal pension plan. I have been offered a two-year contract and access to an employer's pension scheme. What should I do? CHECK the type of pension scheme offered. It may be that you can contribute to both if you are within Inland Revenue limits. If not, ask your pension provider if there are any charges for stopping your premiums for two years. You would lose valuable benefits by not joining the employer's scheme. |
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