Tontine system in Birmingham

[Vivienne14]

What was the Tontine system ?

In a nutshell:

 Capital
The capital for a building could be raised by individuals paying into a common pool of money. Upon joining each investor paid a lump sum, receiving an annual dividend-like payment. A deceased tontine investor's shares were divided among the surviving members, the shares for remaining members then increased.

Nominees
When investors bought shares in a property, for each share they held, the shareholder named a person, called a ‘nominee. This could be themselves or another person. When that nominee died, the shareholder surrendered their share.

Over time, the shares belonged to fewer people, and these people got higher dividends.The shareholder with the longest living nominee got outright ownership of the property. There was no financial benefit to being a nominee. Shareholders could not change their nominees.

Examples of Birmingham buildings built using the Tontine system.




The (Tontine Buildings) Hotel, Temple Row/Dadley's Hotel/later Royal Hotel/Olde Royal Hotel

Source: British Newspaper Archive

 

[mikejee]

That is a real tontine. I would add that, in the south (where I come from), in the 1950s it was also a scheme, usually run by a pub, where people paid in every week and the money was paid out at Christmas for use at that time

 

[A Sparks]

Thanks, not heard that word before!

 

[Stokkie]

I came across Tontine in murder mystery novels. I have a feeling that that they may be illegal under current British law, though a tontine clause is common in France. Lots of British law firms point out the consequences if you own French property with a partner! Divorce rather than death is the issue here.

 

[Morturn]

There are still several public houses and hotels along the River Severn called Tontine. I know of the one in Stourport on Severn, Ironbridge and there is another one in Gloucestershire but cannot remember the name. As stated, they wee a way of investing capital as long as you don’t die too soon.

 

[Stokkie]

R. L. Stevenson and Lloyd Osbourne's comic novel The Wrong Box (1889) has a plot which hinges on a tontine.
https://en.wikipedia.org/wiki/The_Wrong_Box_(novel)

 

[Vivienne14]

Yes Stokkie, I'm pretty sure they're illegal here nowadays. They were a bit of a lottery because whoever you chose as nominee, you'd want to have a lomg life so that they outlived all the other participants and, hence reap the benefits. This advert shows two participants and their ages!

 

[Stokkie]

Yes Stokkie, I'm pretty sure they're illegal here nowadays. They were a bit of a lottery because whoever you chose as nominee, you'd want to have a lomg life so that they outlived all the other participants and, hence reap the benefits. This advert shows two participants and their ages!

Thanks Viv, some apparently nominated a newborn child though in a time of high infant mortality this could be risky.
Amanda Taylor explains for law students: https://lawsblog.london.ac.uk/2020/...d-and-now-probably-illegal-way-to-raise-cash/