FINANCE NEWS: Motability bows to falling stocks with cost-cutting plan

Motability, a charity which supplies new vehicles to disabled people, has been forced to request increased contributions from beneficiaries as a result of the downturn in the equity market.

The charity, which converts and adapts around 6,000 new cars a year for disabled people, has raised the contribution made by beneficiaries towards conversion from £300 to £500. Those who cannot afford to pay will still receive the service free, however.

Director Noel Muddiman said: "It could be damaging to our reputation, but we have to cut costs and increase our income."

The charity has seen its investments lose more than 29 per cent of their value in the past two years. As a result, it has increased the proportion of its portfolio in gilts and is considering an exposure to property and hedge funds.

"This examination of our investment is just good governance,

said Muddiman.

"Trustees should all review whether their investments are correctly structured."

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