COMMERCIAL NETT RETIREMENT ANNUITY

Press, Volume XCV, Issue 28260, 24 April 1957, Page 19

COMMERCIAL NETT RETIREMENT ANNUITY

Investment In Equity

Stocks

A new type of retirement annuity which offers some hope of escaping the worst effects of future inflation has been devised by the London and Manchester Assurance Company, according to the “Manchester Guardian.” The policy offered is not expressed in a fixed sum of cash. Both the annual premium and the annuity are expressed as a sum equal to the price of a stated number of “investment-trust units.”

These units are issued by a trust whose investments are widely spread among the equity stocks and shares of British, American and Commonwealth investment trusts and similar institutions. The investment trusts

in turn hold, of course, a great variety of investments, so that both the risk and the opportunities for growth are very widely spread.

This is an attempt to meet the desire for retirement provisions which are secured on equity stocks rather than on fixed-interest investments such as Government securities and mortgages. “Of course, equity shares are no absolute guarantee against loss through inflation, but the valuation of both premiums and annuity by reference to the current price of the certificates of a unit trust does reduce the dangers,” the paper says. “The policy is drawn in the form of a succession of single annual premiums.

“The contributor can decide each year how much he will pay, subject to a minimum cash payment of £2OO and up to the limit permissible under the 1956 Finance Act. As the supply of the units in which the policy is expressed will be limited, the company states that it will restrict the amount of I business it can accept.”