endownments

[juke]

How does an endownment work. I was under the impression that say for example I pay �67.50 a month does the government pay �32.50 to make up the payments to �100

[Loosehead]

You are thinking of pension contributions. which are tax free at your highest rate. The government isn't giving you anything, they are just not taxing you on that particular contribution. Ie you are paying your pension on income before tax. Not sure what you are getting at with the figures above. Do you pay �67.50 out of your salary into some sort of plan? Give me more info and I'll be more specific.

Endowments are generally a vehicle for investment, although largely descredited, they have been used as the way to pay off a mortgage. You pay the premiums plus interest on the loan, the premiums are invested and the final amount at the end of the term is designed to pay the mortgage off. This method was popular in the 80's but is not recommended these days.