In 1693, the British government created the Bank of England. The Bank partially financed its operations by selling "stocks" which promised a fixed return per annum. These "stocks" were remarkably like the immediate annuity contracts issued by today's insurance companies. In fact, the Bank of England printed the word "Annuities" at the top of each of these "stock" certificates.
Over the centuries, the Bank of England issued different types of income annuities, often changing the rates of interest as economic conditions warranted. The four main series issued between 1780 and 1880 were known by the following names: Consolidated Annuities, Navy Annuities, New Annuities, and Reduced Annuities. You can view the museum's collection of these Bank of England annuity certificates by clicking the following links--
The CollectionConsolidated Annuities
Consolidated Annuities (issued from 1780 to 1880)
In the years following the founding of the Bank of England, the national debt grew quite quickly. It soon became difficult to manage the confusing array of different annuities with their varying rates of interest. In 1751, Parliament passed an act which consolidated all existing British government stocks into a single issue, with a fixed interest rate of 3 percent per annum. These "Consolidated Annuities," also known as consols or perpetual bonds, had no maturity date, and instead were redeemable, on call, by the government. Regarded as a sound investment for providing income in old age, consolidated annuities, during the late 19th and early 20th centuries, made up more than half of the government?s debt. As a result, these unique government-issued annuities were often used to gauge the state of national finances.
Reduced Annuities (issued from 1791 to 1883)
"Reduced Annuities," popularly referred to as three per cent reduced annuities, resulted from the attempt of the British government to capitalize on even lower rates of interest in other markets. This allowed the government to borrow money at a lower total interest rate than would have been otherwise possible. 'Three per cent reduced annuities' were a hot item in their day. In fact, a large number of records of criminal proceedings exist that describe the forgery of reduced annuity certificates, and a great many English citizens were put to death at Old Bailey and Newgate for attempting to falsely transfer reduced annuity certificates into their names.
Navy Annuities (issued from 1810 to 1821)
Navy annuities, often referred to as "Navy five per cents," originated from debts incurred by the English Navy. Civil servants, military commanders, and other state officials commonly paid for services and products rendered to the military with these relatively high interest rate annuities. Many laypersons, as well, cashed in on this opportunity furnished by lending to the military at such high rates, and 'Navy five per cents' became a popular investment vehicle. Mention of this form of government stock occurs in literature and in other popular documentation; for example, in his will, William Bayly, one of the legendary Captain Cook's seamen, specifically mentions leaving certain sums of money in the form of "Navy five per cents" to his beneficiaries.
New Annuities (issued from 1823 to 1837)
Charles Reade, in his work Love Me Little, Love Me Long (1910), writes about the public uproar caused when the British government lowered the rate of return paid on Navy annuities from 5% to 4% because of increasing financial difficulties. "New Annuities" refers to the annuities with interest rates reduced from 5 to 4 percent by Acts of Parliament passed in 1822. As a result of these acts, new annuity certificates reflecting the lower interest rate were issued to holders of the older, 5 percent annuities.
From Adam Tripp
There were numerous editions of the Bank of England annuities. They were issued with subtle differences such as the size or positioning of the text on the sheet, or the addition of some minor text. More commonly they differed by the pre-printed date, e.g. 181_ versus 182_ or 183_. We have identified the following editions so far. (Note: 'n/m' indicates the name of the monarch was omitted.)
- Consolidated Annuities for 28 years George III 178x
- Consolidated £3 per cent Annuities George II 18xx
- Consolidated £3 per cent Annuities George II 180x
- Consolidated £3 per cent Annuities George II 181x
- Consolidated £3 per cent Annuities George II 182x
- Consolidated £3 per cent Annuities George II 184x
- Consolidated £3 per cent Annuities n/a 188x
- Navy Five per Cent. Annuities George III 180x
- Navy Five per Cent. Annuities George III 181x
- Navy Five per Cent. Annuities George III 182x
- Five per Cent Anuities, 1797 George III 180x
- Four per Cent Annuities 1826 George IV 18xx
- The New Four per Cent Annuities George IV 182x
- The New £3.10s per Cent Annuities George IV 183x
- The New £3.10s per Cent Annuities George IV 184x
- Three Pounds Ten Shillings per Cent Reduced Annuities George IV 183x
- Three Pounds Ten Shillings per Cent Reduced Annuities George IV 184x
- Three Pounds Ten Shillings per Cent Reduced Annuities George IV 182x
- £3.5s per Cent Annuities Victoria 184x
- £2.10s per Centum Annuities n/a 188x
- £2.10s per Cent Annuities n/a 188x
- Reduced Annuities, Consolidated 5th April 1781 George II 179x
- Reduced £3 per Cent Annuities George III 18xx
- Reduced £3 per Cent Annuities George III 183x
- Reduced £3 per Cent Annuities George III 184x
- Reduced £3 per Cent Annuities George III 185x
- Reduced £3 per Cent Annuities n/a 18xx
- Reduced £3 per Cent Annuities n/a 188x