If, back in 1952, you had been given a legacy of £100 and invested it in the Witan investment trust — which had already been in existence for 40 years — you would now be looking at a lump sum of £143,719. This assumes you had left the dividends untouched in the fund, a reliable performer with stakes in businesses throughout the Empire.
The skill of Witan’s managers would have left you with a bigger sum than you would have obtained by investing in an index of leading shares — if you had done that you would be looking at £113,500.
The good news is that both shares and property have comfortably beaten inflation over the 60 years of the Queen’s reign.But choosing to put your money into the stock market would have marked you out as something of a gambler. Even Premium Bonds, introduced in 1956, were seen by some as a risky flutter.
The early 1950s was another age of austerity, but with far fewer investment choices for the bulk of the population. If people saved at all it would normally have been in a bank or building society deposit account, paying less than the base rate, which ranged from 2.5 per cent to 4 per cent in 1952. Halifax Building Society, as it then was, paid 2.5 per cent on its subscription shares, and 2.25 per cent on its paid-up shares, while savers in its deposit account received just 2 per cent. Interest rates on Halifax savings products in the early 1950s were at their lowest levels since the society had begun business in 1853.
People were probably dissatisfied with the returns, but had few other options. It’s a situation with which today’s savers are all too familiar.
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As people have grown more financially sophisticated, the proportion of their total savings accounted for by money in deposit accounts has shrunk from 42 per cent to 29 per cent.
When the Queen came to the throne, a growing number of large companies, such as Imperial Tobacco and ICI, were offering pension schemes for their employees and the 1950s saw a revolution in the way that they invested their money — moving away from gilts and into shares. This was partly because in 1952 equities were offering yields of 6 per cent while 10-year gilts yielded just over 4 per cent.
Nevertheless, the stock market remained largely the preserve of a comparatively small number of private investors. They held more than 60 per cent of the stock market — a stark contrast with today, when the percentage of shares held by individuals is about 11 per cent.
For those seeking a wider spread of risk, the choice then as now was largely between unit trusts and investment trusts. Unit trusts were in their infancy, having been started only in the 1930s, though groups such as M&G and Save & Prosper were attracting a growing following. In contrast Foreign & Colonial, the first investment trust, was launched in 1868, when Queen Victoria was on the throne.
Many investors bought unit trusts direct, clipping adverts out of papers and sending them to the fund manager along with a cheque. Those who found equities too risky could buy gilts through the Post Office, which was prepared to deal in modest amounts of less than £50.