Is CGNU worth it?

By THIS IS MONEY
Updated:

 

I have an endowment policy with Norwich Union and have just received a letter from them asking me if I want to redirect all future investments into the stronger CGNU with-profits fund. Is this a good idea or am I better leaving things as they are? PC, Basildon

Justin Modray at IFA Bestinvest replies: With-profits is not the best area to be at present. These types of fund have high exposure to fixed interest and less in equities (following the big market falls between 2000-2002) so have benefited little from upswings in the market over the last two years.

They are also having to rebuild their reserves, so the majority of profits made are being held back rather than paid out. However, assuming you must remain in with-profits, there might be a small benefit in moving future contributions from the Norwich Union fund into CGNU but it won't fundamentally change the poor outlook for this type of investment.

Most watched Money videos