A History of Banks for Savings in Great Britain and Ireland

by William Lewins

The bill as amended by the Committee was passed on the 20th of June. On this occasion many of its members described the benefit which the bill had received from the inquiry, and none now complained of the limited nature of that inquiry. It originally consisted of three clauses; it came out with seventeen, sixteen of which were new. It provided that no policy of Life Assurance should be granted for more than 100l.; and, not to interfere unnecessarily with Friendly Societies, that none should be granted for less than 20l. Mr. Estcourt, especially, warmly espoused the measure. “No one now more desired to see it passed than he did. If a master or employer wished to make a provision by way of annuity for a faithful servant in his old age, he could do so with perfect security under the bill.” He also thought, “that if the working classes of this country did not derive great advantage from the measure, it would be their own fault.” Sir M. Farquhar was equally hearty in his praise of the scheme, and speaking of Mr. Gladstone said, “The country had every reason to thank him.” Mr. Gladstone observed, that it was a matter of great satisfaction to him that as the bill entered the House in peace and quietness, so it was likely to quit it with general expressions of good will.

The bill was carried through the Lords under the charge of Lord Stanley of Alderley, and, passing through its several stages without discussion, received the Royal Assent July 14, 1864, and arrangements were ordered to be made to carry its various clauses into practical operation.

During the long recess the Tables were prepared under the eye of the Commissioners for the Reduction of the National Debt; and, working in harmony with the Commissioners and with a common purpose, the Post Office authorities at the same time arranged the Regulations under which, and the organization by means of which, the whole of the plans should be carried out. The Regulations themselves were, we understand, arranged under the immediate superintendence of Mr. Scudamore, one of the two gentlemen who organized the Post Office Banks; the machinery chosen for the purpose was that of the Receiver and Accountant-General's department. At the commencement of the session of 1865 both the Tables and the Regulations were laid before Parliament and received the proper sanction. The Tables, like all ordinary Insurance Tables, show the various kinds of benefit which Government can now offer to the community, and the price at which these benefits may be purchased. The Regulations, on the other hand, describe the means to be used to obtain these benefits, and give in full the conditions under which any kind of purchase may be made.[202]

The principal features of the new measures taken together may be stated, simply, to consist in a person now being able to insure his life for any sum between 20l. and 100l.; that he does this on Government security; that he may do it without buying an annuity; that he may pay his premiums of insurance in almost any amount, and at almost any period that will best suit his convenience; and lastly, that, attended with the same facilities and advantages which only an institution like the Post Office can offer, a person may now purchase a Government Annuity, either immediate or deferred, of not more than 50l. a year, either with or without the proviso of “money being returnable” in the event of death before the annuity falls due.

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It only remains for us to seek to draw the attention of our readers to the special inducements which the Government now holds out to the practice of a wise economy and frugality, prefacing our account with the remark that a careful study of the “Regulations” from which we glean it, will well repay any time or thought which the masters of workmen, as well as working men themselves, may give to them.

And first as to Insurances. In the course of a short period,—for the offices for the transaction of both kinds of business are being opened rapidly,—every one of the three thousand and odd money-order offices of the United Kingdom, embracing, as is well known, every large village as well as the numerous receiving offices of our large towns, will be formed into an Insurance Agency. When this is the case,—and to a great extent it is so already,—any person, whether male or female, and both if man and wife, of not less than sixteen years of age and not more than sixty, will be able to propose for an insurance on his or her life in a sum of not less than 20l. and not more than 100l. The steps which a person proposing to insure must take in those places already on the list, and the steps which must universally be taken when the whole of the agencies are arranged, may be easily comprehended, and need but few words. If he wants to insure on the security of Government, he must go to the nearest Post Office and apply for the proper printed form. With this form, to which is attached every necessary instruction for his guidance, almost all his trouble begins and ends. It is true that the questions propounded are many, and that they are most minute, and may be thought by the poorer classes who are unused to this sort of thing unnecessarily precise and tantalizing. Any one, however, familiar with the routine of the ordinary Insurance Societies, will not fail to see that the Government are scarcely more rigid than they are, and that, if there are more questions to be answered, it is simply because of the varied modes and unique facilities now first offered to the choice of the insurer. The insurer must fill up this form, and must further produce certificates of age or baptism, and furnish the names and addresses of two householders who know him and can speak as to his identity. What follows, and indeed a great part of the foregoing, is simply the course followed by all well-managed Insurance Offices in the kingdom. The proposal is forwarded to London, the referees are corresponded with, and, if all seems right and straightforward, the person seeking an insurance policy is desired to present himself before the appointed medical referee in order to go through the indispensable examination. The doctor examines the proposer, questions him to the extent he thinks proper, takes down his answers, and then gets the person to sign his name to what may be called his deposition. If nothing unsatisfactory occurs, the policy is made out in the way the proposer originally desired.

The contract being duly drawn up, the insurer may pay his recurring premiums at any of the Offices which have been opened, or which may be opened, as shall at any time be most convenient to him. As in the case of Savings Bank depositors, the life insurer will be furnished with a “Premium Receipt-book,” and whenever he makes a payment he must produce this book, when the clerk or postmaster will enter the amount, sign his name in the way of receipt for the payment, and stamp the date of the transaction and the place of payment with the ordinary official dated stamp. With regard to the time at which the insured must pay his premiums as agreed upon, whether yearly, quarterly, monthly, or fortnightly, the arrangements are necessarily strict; but every means will be, or at least ought to be taken, to make him understand his agreement. If he should fail, say through forgetfulness, to make his payment, he will not be hardly dealt with; for, on an application that the contract may be renewed and the production of evidence of good health, the Postmaster-General will renew the contract, only fining the person in the sum of four shillings if he is insured for 60l., and eight shillings if he is insured for more than that sum.

Once more: should the insured wish to surrender his policy, he will be allowed to do so after the expiration of five years from the date of it, and will receive at least one-third of all the sums he may have paid during the time he has held it. The authorities have not as yet, we believe, stated exactly how much they will be able to offer for surrender policies; but this is scarcely a matter which can be considered pressing, as no policy will acquire a surrender value till 1870.

Then there are the kinds of payment under which a person may now purchase the benefits of Life Insurance through the medium of the Post Office. And certainly the most important arrangement, associated as it is with several novel features, is that of paying down the premium in one sum. Not that this need be the whole transaction of a proposed insurer. He may make his policy, if we may employ such a term, cumulative. Thus, if a person doubts whether he will be able to pay regular premiums for a number of years, he may perhaps be able to effect a small insurance, say of the lowest sum allowable, 20l., by the payment of a single premium. He may afterwards find himself able at subsequent periods to effect another small insurance,—and this he will be allowed to do, even if it only be to the extent of five pounds,—and may thus, whenever he has the money to spare, at regular or irregular intervals, go on increasing the original amount in transactions which, while complete in themselves, continually augment the sum to be received at death.[203] We are not informed in Plain Rules whether the insurer will in each case have to pass a medical examination, or produce certificates of health; but there can scarcely be a doubt that he will be required to do one or the other. The proof of age, however, and other particulars which the insurer furnished in the first instance, will doubtless suffice for all subsequent negotiations.