Aviva in stock U-turn

AVIVA’S attempts to force inves- tors to sell their stock at a loss was abandoned yesterday after complaints from shareholders.

The insurer has ditched a proposal to buy back special high-yield preference shares for less than they were worth on the market.

It follows criticism of the proposal which would have hit thousands of ordinary savers.

The preference shares were created in the 1990s to raise money for expansion, and pay out as much as 8.5pc of their value every year. They had been trading at around 175p when Aviva suddenly revealed it was preparing to buy them back for their face value of 100p each.

Furious savers demanded a rethink and campaigners said that the plan flew in the face of market convention.

Chief executive Mark Wilson said: ‘I am very aware that Aviva is in a position of trust with our customers and investors. Our announcement today means that preference shareholders can rest secure in their holdings.’

Aviva had claimed the plan to cancel the £450m of shares would have saved it £38m a year.