On 20 May investors will learn how many shares they have been allocated
On 20 May investors will learn how many shares they have been allocated. Before rushing off to buy shares, consider these points.Should I buy Railtrack shares?Most brokers say you should fill your boots Last year Railtrack made profits of pounds 189m. This is expected to rise to pounds 233m next year and pounds 285m by the year 2000. If an annuity is bought, its minimum duration is likely to be 18 months..
The spirit of Sid is alive and well, if the number of people registering an interest to buy shares in Railtrack, the holding company that owns almost all of Britain's railway infrastructure, is anything to go by. Around 2 million people have registered an interest in Railtrack with one of the 110 Share Shops authorised to handle applications for the UK public offer (UKPO) that will sell at least 30 per cent of the shares. The closing date for UKPO applications is midday on Wednesday, 15 May, two days later for retail tenders. But many people may think that if there is a one-in-five chance of collecting it is too big a gamble."Mr Bedell-Pearce believes that it is possible to construct a financial product that allows people to take advantage of the capital locked up in their house, using part of it to buy the annuity while the rest is in effect protected.However, the Government aims to make it difficult for people to cheat the taxman by taking out only a very short-term annuity policy - where investors get back most of their money while protecting their assets. It may cost pounds 10,000 to provide the insurance cover necessary to fund the care needed before the disregard applies.
The Government last week offered a glimmer of hope to hundreds of thousands of people worried that the spiralling costs of long-term care in retirement may swallow up the bulk of their assets. Stephen Dorrell, Secretary of State for Health, announcedplans to allow individuals to keep pounds 1.50 of their assets for every pounds 1 of long-term care- insurance cover. This can be added to the pounds 10,000 of assets that Kenneth Clarke, the Chancellor, said in his last Budget would not be part of any means test when entering long-term care.In effect, a person taking out cover worth pounds 30,000 - at a cost of pounds 5,000 - will be able to have pounds 40,000 of assets disregarded completely when the local authority assesses its contribution to the costs of care.Alternatively, people will be given the choice of a pound-for-pound disregard of their assets plus a further pounds 15,000 thrown in, if care has been bought for four years by an individual.More flexible pension arrangements are also planned, allowing someone reaching retirement age to choose a smaller initial pension in return for a higher amount when care is needed.Lastly, the Government proposes to make it easier for people to buy "immediate care annuities", lump sums paid at the moment when long-term care is needed, funded out of equity released from peoples' homes.The potential attractiveness of annuities, were such a figure to be chosen, lies in the fact that, unlike conventional insurance policies, one need not gamble on needing long-term care.Keith Bedell-Pearce, managing director of Prudential UK, said: "Indemnity insurance is something of a lottery. Even a relatively modest flute or clarinet can cost several hundred pounds to replace, yet few are adequately included in the insurance equation.Thirty minutes of unattended "in-vehicle" cover, to account for loading up and unloading, is generally standard.Perhaps surprisingly, busking is not considered an issue, despite the greater possibility of damage to your instrument and the fact that, strictly speaking, it is an illegal activity.q Contacts: Musicians Union insurance advisory service (through Victor C Knight) 0181-886 4202; Minet 0800 387250; British Reserve, specialist musical instrument arm of Cornhill Insurance, 01892 515244.. Schoolchildren and teachers regularly take valuable instruments to lessons and performances with little thought for the problems of damage or theft. Costs mount by pounds 1.50 a year for each additional pounds 100 of cover provided.The minimum annual premium of pounds 25 will cover the greater part of pounds 2,000- worth of musical hardware, enough for an average instrument and associated amplification.A working band with several guitars, keyboards, drum kit and associated gismos worth pounds 10,000 would still be able to cover a year's activity for about pounds 150 - a night's fee for many bands.Classical instrument rates can be half that amount for the equivalent replacement value. Minet, an insurance broker that works with the MU, claims to be able to negotiate special rates on all kinds of musical instrument.Richard Jenner, Minet's divisional director, says: "Quite simply, the advice is: do not use the home contents policy." Many contents policies will have inadequate cover for taking your instrument out of the house - whether to go busking, to a lesson or to a gig.By joining the MU, musicians can get cover for as little as pounds 1 a week.
Equipment such as computers used to store musical sequences and generate background rhythms can be covered under the musical instrument banner.Nor is specialist insurance only for the professionals. Costs rise according to earnings from music in the preceding year.The MU takes responsibility for the first pounds 500 of a claim in any one year. They are less common in modern policies, but can still figure in the small print. If you earn money from your music, you might actually invalidate the policy.The answer, for some brokers, is specialist musical instrument insurance, providing a cheaper and more comprehensive option.The Musicians Union offers professional insurance advice as a benefit of membership. A CML booklet, How to Buy a House, explains how interest rates are calculated.