Chatham Chest

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The Chatham Chest was a fund set up around 1590 to pay pensions to disabled seamen. It was financed by members' contributions which were deducted from their pay, and has therefore been described as the world's first occupational pension scheme. The assets of the scheme were held in an actual chest which is also called the Chatham Chest. The Chest was previously located in the National Maritime Museum at Greenwich, London., and is now on display at The Museum of the Royal Dockyard, in The Historical Dockyard Chatham.

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Originally conceived as a charity, the Chest was established after many seamen who had been disabled in the war against Spain petitioned Queen Elizabeth for relief and maintenance. Although the Chest was financed at first entirely by members' contributions of sixpence per month, the Government had to give a pay rise first. The main credit for founding it probably belongs to Charles Howard, Lord Howard of Effingham (1536-1624), the lord high admiral of England. Pensions were granted on a fixed scale, the amounts of which ranged from £6.13s.4d per annum for the loss of a limb to £15 per annum for the loss of both arms. In addition each pensioner was granted an immediate lump sum, generally equal to one year's pension, called "smart money".

During its long life the Chest experienced many difficulties. In the early days income exceeded expenditure and the balance was invested in property. However, it was not always easy to ensure that the contributions deducted from seamen's pay at the end of voyages actually reached the Chest. By 1660 the Chest had serious financial problems, because the number of pensioners had increased during the First Dutch War and the war aginst Spain, but when peace returned and the ships were paid off, the Chest's income dramatically decreased. The first expedient adopted was to offer pensioners voluntary commutation of their pensions, based on 2 years' purchase, but still the Chest found it difficult to pay the remaining pensions. Samuel Pepys, Clerk of the Acts to the Navy Board, took a great interest in the affairs of the Chest and reported in his diary (18th June 1667) that there was no money to pay the pensioners 'at their public pay the 14th of this month, which will make us a scorn to the world'. However, the money was found and taken down the Thames by barge to Chatham, and the immediate crisis was staved off. From about 1673 onwards it became tacitly accepted that the Government would meet the excess of expenditure over income each year on a "pay as you go" basis. This principle remained in force, though sometimes the Government was late in paying and pensions fell into arrears. In 1690 some pensions were as much as three years outstanding. The Chest experienced a substantial increase in the number of pensioners during the Napoleonic wars, rising to 5,205 in 1802. Following an Act of Parliament in 1803 the Chest was merged with Greenwich Hospital. The merger was completed in 1814, by which time the Chest had existed for 224 years and had been an undoubted success, helping to meet the needs of poor people whose physical handicap made the struggle for survival even harder than usual.

Reference: Lewin, C.G. Pensions and Insurance before 1800 - a social history, Tuckwell Press, 2003, 216-243.

Category: Economic history