Share-owning bandwagon rolls on

Gone are the days when factory workers and office secretaries spent their lunch breaks huddled over the Financial Times and mugging up on brokers' reports. The golden era of wider share ownership that dawned with the privatisation of British Telecom appeared to last only as long as it took the Government to sell off the last of the family silver.

But appearances can be deceptive. The reality is that Britain has entered a new phase of mass share ownership.

Huge numbers of small shareholders remain - some 11 million, according to latest estimates - but they make rather less noise than they used to. Commercial democracy is a more discreet affair these days.

So who are the small shareholders of 1995?

Dear old Sid is still around, hanging on to the few hundred pounds worth of shares he bought in the first big round of privatisation issues. Then we have SuperSid, as it were - family portfolios whose value may typically be in the region of £10,000 or more.

Sid and SuperSid can be expected to stay exactly as they are, cheerfully banking their dividend cheques, likely to deal again only if tempted by a new issue.

Next we have the hobbyists, for whom a share deal is part of their weekend, and on yet a higher level, the amateur specialists who trade as experts in a few chosen stocks.

The pessimistic view is that the vast majority of these small shareholders will eventually get bored and sell up, returning Britain to an earlier age in which share ownership was restricted to the wealthy.

It won't happen overnight, the pessimists concede. The privatisation bandwagon, while slowing, is not quite at a standstill. Several high-profile new issues such as BSkyB have revived appetites. And the impending launch of the Alternative Investment Market will bring in new players. But in the longer term, it is argued, the concept of mass share ownership is dead.

This is nonsense. Quite the opposite is true. Bubbling away under the surface are powerful currents that are sweeping the share revolution towards new horizons.

Take the explosive growth in employee share schemes. Some 2,300 of Britain's top public companies operate such programmes, turning millions of staff into first-time shareholders, and boosting the portfolios of many more. As well as providing the employee with a tax-efficient stake in the enterprise, share schemes enable companies to issue stock which can later be traded, boosting share liquidity without the need for a big rights issue.

Another important development is the spread of investment clubs. Enormously popular in countries such as France and the United States, investment clubs tend to be sneered at in the City and ignored by the British financial media. Yet they are proving to be increasingly important in rolling back the frontiers of wider share ownership.

There are about 800 investment clubs in Britain operating under the guidance of ProShare, the share promotion organisation set up by the Stock Exchange.

From Cornwall to the northern tip of Scotland - there are even two clubs on North Sea oil rigs - small groups meet for a drink, a chat and a punt on the stock market. At least, that is how it starts. Club members tend rapidly to develop real expertise in stocks and shares and to trade actively in their own right.

These trends explain why the number of small shareholders, far from declining, has continued to rise over the past few years. But even the figure of 11 million is almost certainly understated. The reason is the existence of a sizeable body of "invisible" shareholders - investors in personal equity plans.

Some £25bn is held in PEPs, much of it invested directly in equities. Yet a PEP owner who chooses to invest in the stock of a particular company is not registered by that company as a shareholder. Nor, for that matter, are investors whose stock is held by a broker, investment club or nominee.

Having established that the momentum towards wider share ownership remains in full flow, the priority now is to remove any barriers that remain. Everyone - City, government and small investor - can play a part.

It is up to financial institutions to tear down the language barricades. Poor communication betrays a product-led sales culture. The Government also has some communicating of its own to do. Complicated regulations relating to PEP and investment protection are a barrier to new investors. Surely it is possible to simplify the rules without diluting investor protection.

The author is director of business planning at Barclays Stockbrokers.

BEST DEPOSIT RATES

INSTANT ACCESS Telephone Account Notice Deposit Rate Interest

or term % interval

Buckinghamshire BS 01494 873064 Chiltern Gold Postal £1,000 6.20 Year

Skipton BS 01756 700511 3 High Street Instant £2,000 6.25 Year

Britannia BS 01538 392808 Capital Trust Postal £10,000 6.50 Year

Northern Rock BS 0500 505000 Go Direct Postal £20,000 6.70 Year

NOTICE ACCOUNTS

Bradford & Bingley BS 0345 248248 Direct Notice 30 Day (P) £10,000 6.90 Year

Coventry BS 0345 665522 Postal 50 50 Day (P) £2,000 6.55 Year

Scarborough BS 01723 368155 Scarborough 50 50 Day (P) £25,000 7.35 Year

Northern Rock BS 0500 505000 Postal 60 60 Day (P) £50,000 7.25 Year

TERM ACCOUNTS

Portman BS 01202 292444 Fixed Interest Bond 1 Year £500 7.00 fixed Year

Nottingham Imperial BS 01602 817220 Imperial 365 1 Year £25 8.00 Year

Birmingham Midshires BS 0500 710710 Quantum Fixed 2 Year £5,000 8.15 fixed Year

Woolwich BS 0800 400900 3 yr fixed rate bond 3 Year £500 8.50 fixed Year

MONTHLY INTEREST

Birmingham Midshires BS 01902 710710 First Class Postal £1,000 4.79 Month

Britannia BS 01538 392808 Capital Trust Postal £2,000 5.84 Month

£10,000 6.31 Month

£25,000 6.55 Month

TESSAS (tax-exempt special savings accounts)

Sun Banking Corp 01438 744500 5 Year £8,900 9.00 fixed Year

Manchester BS 0161 832 0101 5 Year £8,400 8.00 fixed Year

Market Harborough BS 01858 463244 5 Year £9,000 7.75 Year

Hinckley & Rugby BS 0800 774499 5 Year £3,000 7.65 Year

HIGH-INTEREST CHEQUE ACCOUNTS

Woolwich BS 0800 400900 Current Instant £500 3.85 Year

Halifax BS 01422 333333 Asset Reserve Instant £5,000 5.00 3 Months

Chelsea BS 0800 717515 Classic Postal Instant £2,500 6.00 Year

£25,000 6.50 Year

OFFSHORE (gross)

Portman Channel Islands 01481 822747 Instant Gold Instant £5,000 6.20 Year

Derbyshire IOM 01624 663432 Instant Access Instant £25,000 6.65 Year

Bradford & Bingley IOM 01624 661868 Island Ninety 90 Day £10,000 7.05 Year

Halifax JSY 01534 59840 Fixed Rate Intl 1 Year £50,000 7.70 fixed Year

NATIONAL SAVINGS

Accounts & bonds (gross) Notice or term Deposit Rate % Interest interval

INVESTMENT ACCOUNTS 1 Month £20 5.25 Year

£500 5.75 Year

£25,000 6.00 Year

INCOME BONDS 3 Month £2,000 6.50 Month

£25,000 6.75 Month

CAPITAL BONDS (Series I) 5 Year £100 7.75 fixed Maturity

FIRST OPTION BONDS 12 Month £1,000 6.40 fixed Year

£20,000 6.80 fixed Year

PENSIONER'S GUARANTEED INCOME BOND (Series 2)

5 Year £500 7.50% fixed Month

NS Certificates (tax free)

42nd ISSUE 5 Year £100 5.85 fixed Maturity

8th INDEX-LINKED 5 Year £100 3.00+RPI Maturity

CHILDRENS BOND (Issue G) 5 Year £25 7.85 fixed Maturity

P= by post only. All rates are shown gross and are subject to change without notice.

Source: Chase de Vere Investments PLC - 0171 404 5766. Compiled on 24 March 1995

BEST BORROWING RATES

MORTGAGES

Fixed rates Telephone Rate/period Max Fee Incentive

% advance % £

Yorkshire BS 01274 740740 1.90 to 1/4/96 95 £250 -

Birmingham Midshires BS 0500 710710 2.49 to 1/1/96 95 £250 -

Northern Rock BS 0800 591500 5.49 to15/4/97 95 £250 -

Ipswich BS 01473 211021 8.25 to 1/1/99 95 - Free valuation - EBs

Northern Rock BS 0800 591500 8.54 to 15/4/00 95 £250 Free valuation

TSB Local branch 9.49 to 31/3/05 95 £250 Free valuation

Variable rates

Coventry BS 0800 126125 2.00 to 1/6/96 95 - £300 Cashback

Bristol & West BS 0800 100117 2.49 for 1 year 90 - -

Principality BS 0117 929 7804 5.25 to 1/6/96 90 - Free valuation

Greenwich BS 0181 858 8212 6.25 for 3 years 95 - £350 Cashback - FTB

PERSONAL LOANS

Unsecured Telephone APR Fixed monthly payments on £3,000 for 3 years

% With insurance Without insurance

Midland Bank Local branch 15.40 £116.54 £103.14

National & Provincial BS 0800 808080 15.50 £118.22 £103.29

Clydesdale Bank 0141 248 7070 16.20 £113.94 £103.33

Secured Max advance % Max term

Royal Bank of Scotland 0800 161616 10.90 70 3 years to retirement

Midland Bank Local branch 11.40 80 5 to 30 years

First Direct 0800 222000 11.20 80 Up to 40 years

TYPICAL OVERDRAFTS

Telephone Authorised Unauthorised

EAR % EAR %

Barclays Bank Local Branch 19.20 29.80

Lloyds Bank Local Branch 19.40 26.80

National Westminster Bank Local Branch 18. 90 33.25

BEST OVERDRAFTS

Telephone Authorised Unauthorised

EAR % EAR %

Woolwich BS 0800 400900 9.50 29.50

Alliance & Leicester BS 0500 959595 9.50 29.80

Abbey National 0800 555100 9.90 29.50

CREDIT CARDS

Telephone Card name Minimum Rate APR Annual

income pm % % fee

Standard

Robert Fleming (S&P) 0800 282101 Mastercard/Visa - 1.00 14.60 £12

Royal Bank of Scotland 0800 161616 Mastercard - 1.14 14.50 -

TSB Local branch Mastercard/Visa - 1.38 17.90 -

Gold cards

Lloyds Bank Local branch Mastercard £20,000 1.00 14.50 £40

Midland Bank Local branch Visa £20,000 1.30 18.10 £35

MBNA International 0800 062620 Mastercard/Visa £20,000 1.45 18.90 -

STORE CARDS

Payment by direct debit Other methods

Telephone pm APR pm APR

John Lewis Local store - - 1.39 18.00

Marks and Spencer 01244 681681 1.70 22.40 1.84 24.40

Burtons Local store 1.97 26.30 2.21 29.90

EB=Existing Borrower APR=Annualised percentage rate. EAR=effective annual rate.

All rates are subject to change without notice.Source: London & Country. Freephone 0800 373300 Compiled on 23 March 1995