New Pension Plan

City of London Investment Trust PLC
12 December 2002

Thursday 12th December 2002


               City of London Investment Trust and Alliance Trust

              Savings launch simple, low cost pension savings plan
      An easy way to take advantage of pension tax breaks of up to £1,440*


A new pension plan is launched today - The City of London Alliance Trust Pension
plan - to provide individuals under 75 with a tax efficient and low cost pension
savings plan (see note 1). This plan is designed to be totally transparent,
offering investors the opportunity to allocate their investments between the
Henderson Global Investors managed City of London Investment Trust and the
Alliance Trust, a self managed investment trust (see note 2). Investing in this
plan allows investors to access the expertise of two well known investment
trusts, one focusing on investment in the UK and the other investing
internationally. Investments may be made by filling in a single application
form.

In addition to those not currently in a company pension and people not fully
funding a personal pension, this pension plan can be taken out by retired and
self-employed people and cash can be gifted to non-earners, spouses, children
and grandchildren. A maximum of £3,600 per tax year can be invested. However,
investors need contribute only £2,808 net, as £792 is claimed from the Inland
Revenue, even if the member pays no income tax. Higher rate taxpayers can claim
an additional £648 higher rate tax relief.*

Moreover, for investments made before 31 January 2003 investors, who have not
yet used up their allowance for the 2001/2002 tax year, can double their
contribution up to £7,200 (gross) - with the Inland Revenue paying £1,584 of
this (see note 3). For higher rate taxpayers the amount from the Inland Revenue
will be £2,880.

Costs have been designed to be very low with the pension's transaction based
charging structure allowing a pension fund to build up without incurring the
significant costs that can occur where there is an annual charge or a value
based charging structure. The initial charge for making the maximum lump sum
investment of £3,600 gross would be no more than £20 plus £18 stamp duty, which
compares very favourably with other pension plans. As there is no annual pension
management charge, total costs over the long term can be significantly less than
the stakeholder limit of 1% per year.

Simon de Zoete, Chairman of The City of London Investment Trust, says:

"For investors, finding an appropriate method for pension saving is currently a
real conundrum, so we are particularly delighted to be able to announce a
simple, low cost plan, with substantial tax advantages and sensible investment
choice. Members will also have transparent access to the content and value of
their plan at any time. The City of London Alliance Trust Pension plan should be
attractive for a wide variety of people, ranging from retired people to
grandchildren."

Job Curtis, the fund manager, adds:

"We use a conservative investment style and favour companies with strong cash
generation and sound asset backing and the capacity to deliver dividend growth.
We also seek to invest in high quality companies when they are out of favour for
short term reasons but offer attractive long term value."

Gavin Suggett, Chief Executive of The Alliance Trust, comments:

"Pension provision requires a long term investment horizon together with
efficient and economic administration. We believe that this product is
particularly appropriate for many first time pension savers putting money away
for retirement. It combines the investment expertise of two long established and
well respected investment trusts, tax efficiency and the experience of Alliance
Trust Savings, our subsidiary, which has been providing low cost pensions for
many years. We are delighted to be teaming up with City of London Trust in this
unique way."

Interested investors can telephone The City of London Alliance Trust Pension on
                                  0800 832 832




                                      - end -



FOR FURTHER MEDIA ENQUIRIES:

Simon de Zoete, Chairman,                        Tel: [phone]
The City of London Investment Trust

Gavin Suggett, Chief Executive,                  Tel: [phone]
The Alliance Trust

Stephen Westwood                                 Tel: [phone]
Head of Investment Trusts                        [e-mail]

Henderson Global Investors
James McDonald / Alistair Kellie                 Tel: [phone]

Citigate Dewe Rogerson                           [e-mail]






NOTES:

* The value of tax benefits will depend on the members' individual
circumstances.

Note 1. Anyone who is a UK resident and under 75 can apply, earners (unless a
member of an occupational pension scheme and earning more than £30,000 per
year); self-employed; a non-earner; a child; retired and already receiving a
pension.

Note 2. The first £50 of the pension is invested in shares in the Alliance
Trust; thereafter savers can invest in the two investment trusts in any
combination they choose.

Note 3. If investors have not maximised their contributions in 2001/2002 they
can elect, using the Plan's Carry Back Pack, for a pension contribution, or part
of it, to be treated as if paid in 2001/2002. This allows investors to
contribute up to £7,200 gross in 2002/2003.

Lump sum or monthly direct debits - £50 minimum

Contributions can be made by cheque or by monthly direct debit. The minimum
contribution by cheque is £100 and the maximum is £2,808. Direct debits, which
must be for a minimum of £50 (but not more than £234) each month, can be stopped
at any time without penalty.

Transfer out any time

This plan, which is designed as a means of saving for retirement, is designed to
be as flexible as possible and investors can transfer out at any time. Investors
are completely free to choose the most appropriate annuity provider or pension
provider who offers income withdrawal in the market when they choose to take
pension benefits.

Low charges

Charges in this pension are transaction based and can work out, over the
long-term, well within the 1% stakeholder limit. This pension is not a
stakeholder pension.

About City of London Investment Trust / Henderson Global Investors

The City of London Investment Trust plc, with total assets of £430 million (as
at 9th December 2002), invests predominantly in UK equities. Its prime objective
is to out perform over the long term the total return of the FTSE All Share
index through a combination of capital growth and income generation.

About Alliance Trust/Alliance Trust Savings

The Alliance Trust was incorporated in 1888 and has total assets in excess of
£1.3bn (as at 11 December 2002), invested globally. The Trust aims to provide
the core investment for those who wish to build up a long term store of
increasing value.

Alliance Trust Savings Limited is the banking and savings subsidiary of the
Alliance Trust and provides Pensions, ISAs, PEPs and Investment Plans worth in
excess of £900m for more than 35,000 clients.



            Past performance is no guarantee of future performance.

The City of London Alliance Trust Pension is provided by Alliance Trust Savings
                         Limited, regulated by the FSA.






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            The company news service from the London Stock Exchange