Money helpdesk: I HAVE both a with-profits endowment and pension invested with Standard Life, and am aware that the company has announced its latest bonus. What does this mean for my investments?

I HAVE both a with-profits endowment and pension invested with Standard Life, and am aware that the company has announced its latest bonus. What does this mean for my investments? Would I be better cutting my losses at this stage?

TM, Edinburgh

Danny Cox, of Hargreaves Lansdown, writes:

With-profits investments have been in terminal decline for nearly 10 years. Poor management and returns have taken their toll. In some cases funds have had to close and bonuses have hit zero.

Compared with other with-profits funds, Standard Life has done OK. But for most, returns are still falling and have little prospect of recovery. I would not recommend anyone placing new money in with-profits products.

Whether you cut your losses and run now depends on several factors. I used to say if there is a short time to maturity, hang on. However, since terminal (maturity) bonuses continue to be cut, this may no longer be the right course of action.

If you cash in your endowment, use the proceeds to pay down your mortgage or boost your pension. Bear in mind you will lose life insurance.

You may be able to sell the policy to a traded endowment broker for more than the surrender value, but this is unlikely.

With regard to the pension, you might have the option to switch funds from with-profits, take benefits if you are aged over 50 (55 from April) or perhaps switch to another pension plan.

Be sure you know what penalties or market value reductions may be applied and consider reinvestment costs.