With-profits endowment policies have underperformed the wider stock market and even cash on deposit, according to the latest survey from the FT magazine Money Management. In some cases, the worst policies have returned less on maturity than the premiums paid - without even taking account of the market value reductions (MVRs) being imposed on investors who want to surrender a policy early.

Over a 10-year term, Money Management found that the worst with-profits endowment, from London Life, returned £5,376 on total monthly premiums of £6,000. During that period, the same £50 a month would have grown to £6,517 in a UK index tracker fund, or £6,874 in the average 90-day notice savings account. Even over a 25-year term, some policies have still underperformed cash, with a Life Assurance of Scotland policy returning £24,502, against £26,817 in the savings account.