Traded Endowments Guide
An endowment is a financial product that, in the past, was commonly sold as a way to pay off
mortgage capital. The holder would pay a monthly sum into a fund which was linked to the financial
markets. The theory was that, upon maturity they would then have benefited from the rise in
value of the stock market and the sum would pay out in cash to cover all or part of their
Unfortunately due to the recent stock market crash many people with endowments have been
left with funds that are worth nothing compared to what they had expected, and thus paying
your mortgage by linking it to the market has gone out of fashion.
As a consequence endowments are not so common today as they used to be, but the trade of them
now exists allowing you to cash-in your endowment and put the fund into your mortgage early
by selling it to a specialist firm. The firms are taking a risk by probably paying you over
the market rate of what the endowment is worth because they are banking on rises in the
market but if you are trading you can’t afford to wait for those rises to happen and so both
parties can potentially benefit. It is worth checking with your financial advisor as to the
worth of your endowments and seeking advice before making a trade.
You can find an IFA to advise you on trading an Endowment by using our search facility
on the right, or by browsing through the counties on the left to find IFAs in your town.