Could selling my endowment help me cover care costs for my parents?

Chancellor of the Exchequer Alistair Darling announced in the pre-Budget report that under his proposals the NHS appears to be safe from significant spending cuts.

However, Age Concern and Help The Aged said that the care sector has been left wondering what the Budget means for them. Indeed, with the police, schools and the NHS all promised to be protected from cuts, the two charities claim the axe will therefore fall outside of the public sector and potentially hit care.

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 endowments in order to raise the cash to help cover the cost of care for their elderly parents.

Concerns over care sector funding

The report by the two charities noted that 146,000 people in residential care pay all of their own costs. However, they may have needed to raise the cash beforehand to ensure they receive a high standard of services.

In 2008, there was an estimated 394,000 older people in residential care, while 450,000 older individuals have care needs, which could include having frequent visits by a private carer or nurse.

Furthermore, the average weekly fees for residential care in England stand £60 higher than the typical council payment.

Commenting on the Budget, Andrew Harrop, head of public policy at Age Concern and Help the Aged, said: "To prevent care services from getting any worse and lives being placed at risk, the Chancellor's commitment to protect health spending must be extended to social care as well as the NHS.

"Spending from the health budget should be re-prioritised to provide additional funding for the care system."

However, many Britons may decide to pay for private care or services outside of the remit of the NHS and this could require significant funding.

Selling endowment policies could cover care costs

Mr Radford, from aap, said some of its customers had decided to sell their unwanted endowment policies to ensure their mums and dads got the best care possible.

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.

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Selling endowments could help first-time buyers

An increasing number of local authorities are becoming more affordable for first-time buyers looking to get on to the property ladder, a new report has found.

The Halifax study revealed that for someone on average earnings, in 2007 only six per cent of areas were affordable. This increased to 24 per cent between 2008-09 and now stands at 39 per cent.

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 endowments in order to raise the cash to help loved ones with their first mortgage deposit.

Housing more affordable but still too expensive for many

Despite the improvement in affordability for first-time buyers, it still means that almost 60 per cent of local authorities are out of reach for many Britons who take home an average wage.

Parents and grandparents may want to help loved ones get on to the property ladder but are wary about dipping into their own savings or taking out a personal loan to support them.

The tightening in mortgage lending has added to the troubles of those people who cannot raise a large deposit. The economic downturn meant mortgage lenders have offered reduced financial support and are wary about taking on 'risky' customers.

According to the Halifax poll, London and Northern Ireland are the most unaffordable places for first-time buyers to purchase a home. The two most affordable regions are the north-east and Yorkshire and the Humber.

Commenting on the findings, Martin Ellis, housing economist at Halifax, said: "Housing affordability for potential FTBs has improved substantially over the past two years due to the combination of lower house prices and reduced mortgage rates. Mortgage payments in relation to earnings are currently significantly below the average during the past 25 years."

Selling endowment policies could help first-time buyers get on to the property ladder

Mr Radford, from aap, said some of its customers with children or grandchildren had decided to help them get on to the property ladder by selling their unwanted endowment policies to raise the cash to help cover the cost of a deposit.

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.

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Selling endowment policies may be more ideal than switching debt

The number of Britons who are transferring credit card debt to a card which offers an introductory offer of zero per cent interest has risen, a new report has revealed.

Findings from Santander Cards showed that in the first three months of 2010, £2 billion will be moved to new credit cards in an attempt to stop interest climbing on their balances.

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 endowments in order to clear their credit card debt, rather than simply switching between products.

Switching to new deals to try and tackle debtIt was recently reported by aap that some lenders are clearing their customer's smallest credit card debts first, leaving the biggest amounts to accrue interest.

As such, Britons who are struggling to stay on top of a number of credit card repayments could find a larger proportion of their income is spent on meeting these financial commitments.

Switching to a zero per cent interest card could be seen as an ideal short-term technique for keeping interest down. However, these only last for a short while and consumers will eventually have to start paying higher interest levels again.

The Santander Cards study found that five per cent of people over the age off 55 intend to switch their credit card debt to a different product, with the majority of individuals deploying this technique below this age.

More than 4.5 million Britons will use this technique in the first three months of this year.

Emma Roberts, director at Santander Cards, said: "The number of people transferring balances has risen year on year, whilst the amount being transferred has fallen dramatically; this is a clear sign that consumers are becoming savvier when it comes to managing their finances."

Selling endowment policies could clear credit card debt

However, Britons searching for long-term financial security may want to clear their debt completely.

Mr Radford, from aap, said some of its customers had decided to sell their unwanted endowment policies in order to strengthen their financial standing for the long term.

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.

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Selling endowments could help those households from falling further in the red

During the third quarter of 2009 Britons borrowed an average 32 pence for every pound saved, the highest level of borrowing for the year, a new study has revealed.
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 underperforming endowment policies and start clearing their debt, rather than turning to further credit to see them through the economic downturn.

Many households relying on credit during the recession

The poll by Unbiased.co.uk found that saving levels have also dropped. During the second quarter of the year £19 billion was saved by Britons, but this declined to £13 billion during the third quarter.

With less money put to one side, people could find that large expenditures are less able to be covered and, as such, personal loans and credit cards could be relied upon to cover the cost.

Debt levels have not reduced in order to accommodate this decline in saving. They are now almost double what they were at the start of the year.

This could mean that many households will have to tackle climbing debt repayments in 2010.

Chief executive of Unbiased.co.uk Karen Barrett said: "After the dramatic retreat from savings in favour of paying off personal debt in the first half of 2008, consumers are now slipping back into old habits, by borrowing around a third of what they save."

She added that with "savings levels currently billions lower than they were back in 2006 and 2007, this is creating a serious barrier to a sustained economic recovery".

Selling endowment policies could help get households back into the black

Mr Radford, from aap, said some of its customers who wanted to get their household coffers out of the red had decided to sell their unwanted endowment policies so they could make headway into clearing debt.

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.

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Could selling endowment policies offer financial security?

Households keen to start a family may want to make sure that they can provide their children with the financial security that they need in order to enjoy a comfortable upbringing.

A study conducted by National Savings & Investments (NS&I) reveals that 64 per cent of Britons think financial security is important to put in place before considering starting a family for the first time.

With the suggested annual cost of raising a child being around £25,000, many would-be parents could find this figure hard to save in order to give their child the kind of start in life they hope for.

Chris Radford, from aap, the UK's biggest buyer of endowment policies, said some of its customers with children, or who plan to start a family in the near future, had decided to sell their underperforming endowment policies so that they could raise the cash required to help with family costs.

The £25,000 figure is the annual income that many Britons believe is necessary to cover the cost of raising a child, according to the research, while the majority (78 per cent) list money as a deciding factor behind the number of offspring that they choose to have.

However, for 12 per cent of respondents, an annual household income of between £40,000 and £70,000 is suggested as being necessary before it becomes reasonable to have children.

NS&I savings spokesman Tim Mack says: "Starting a family is always going to be much more than a purely economic decision."

But he adds: "Britons are also considering their financial future when deciding on the number of children they will have."

On average, men were keen to put in place more of a "financial cushion", typically wanting a sum of £27,000 to pay for bringing up a baby, compared with women's general desire of £23,000 as a monetary safety net.

Mr Radford, from aap said some of its customers have decided to sell their underperforming endowment policies in order to address their current financial standing and make their family finances stronger for the future.

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.

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Selling endowments could help grandparents support loved ones

Over a third of grandparents currently put money to one side for their grandchildren, with over 40 per cent claiming they save on a regular basis, new research has revealed.

According to the study by OnePoll.com commissioned by F&C Investments, a greater proportion of grandparents in London save or invest for their grandchildren compared to the rest of the country.

This could be because of higher private school fees and more expensive property, meaning loved ones may need a helping hand when it comes to putting a deposit down on their first home.

Grandparents who want to financially help out their grandchildren for a number of expenditures, including education, the cost of a new car or a deposit on a first home, may have considered taking out a loan or dipping into their savings in order to be of some assistance.

However, putting their own finances at risk may be a route many grandparents will want to avoid, but at the same time, they could be concerned how loved ones will cover the cost of such ventures.

Chris Radford, chief executive officer of aap - the UK's biggest buyer of endowment policies - said some of its customers with grandchildren had decided to sell their underperforming endowment policies in order to help raise the cash to cover the cost of education for their loved ones, as well as other expensive outgoings.

The study discovered that providing funding for education is the most common reason why grandparents save money for their family. This percentage increased for those living closer to London.

For 30 per cent of grandparents, saving allows their grandchildren to spend the money on whatever they like, which could include a new car for when they pass their driving test.

Commenting on the findings, Jason Hollands, director at F&C Investments, said: "The UK economy differs widely across the country so it is perhaps less surprising to see a greater proportion of grandparents based in and around the capital investing for their grandchildren.

"With London and Edinburgh the UK's biggest financial centres, it is also unsurprising to see grandparents in these locations most willing to use stockmarket-based investments."

Mr Radford, from aap, said some of its customers had decided to sell their unwanted endowment policies in order to raise the cash to help financially support their grandchildren.

He added that should aap make an offer to purchase an unwanted endowment policy, it will always pay more than the surrender value offered by the insurance company.


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Could selling endowments help business owners stay afloat?

Owners of small businesses in the UK are working longer hours to ensure that their companies do not go under, a new survey has found.

On average, small-business owners work 47-hour weeks, while one in six admit they put in 65 hours a week to stay afloat, the research by Abbey and Alliance & Leicester Business Banking revealed.

More than a third of such professionals are now working longer hours than they were a year ago. In the second quarter of 2009, the number of insolvencies rose by almost 40 per cent when compared to the same period of 2008.

Many business owners of small enterprises could be tempted to dip into their own savings or to take out a personal loan in order to prop up their company.

However, this could store up monetary problems for the future and many business owners may prefer to raise the cash needed to keep their firm afloat without resorting to loans and their own savings.

Chris Radford, chief executive officer of aap - the UK's biggest buyer of endowment policies - said some of its customers who own businesses had decided to sell their underperforming endowment policies in order to raise the cash to clear their company debts, without falling into the red at home.

Under the European Working Time Directive, the maximum number of working hours permitted is 50 hours. Rather than putting in significant hours at work or relying on personal loans and savings to see a company through the economic downturn, Britons may want to find a large sum of cash to place themselves on a more stable footing.

Paula Ickinger, head of business banking marketing at Abbey and Alliance & Leicester, said: "The recession is having a huge impact on small businesses in this country and many owners are sacrificing their work-life balance by working longer hours as they struggle for the survival of their business."

Mr Radford, from aap, said some of its customers who own their own businesses had decided to sell their unwanted endowment policies to help keep their company afloat.

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.


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