Skipton / Scarborough savers to get extra protection from FSCS

Savings customers, who hold joint membership of Skipton and Scarborough building societies at the date of the proposed merger, will benefit from new rules that offer them additional cover from the Financial Services Compensation Scheme (FSCS), it has been announced today.

Having reviewed the rules closely and approached the FSA with its proposals, Skipton Building Society can confirm that saving members, who hold accounts with both societies at the date of the proposed merger, will now be eligible for this ‘double cover'. Following completion of the merger, these savers will have £100,000 of protection for the savings under the FSCS (£200,000 for joint accounts).

Skipton has proactively sought to find a method by which its proposed merger with Scarborough Building Society can progress as planned and still offer the new, additional cover provided by the FSA's rule changes. To achieve this, all Scarborough Building Society savings accounts will be transferred to Skipton, as planned, but will retain the name "Scarborough" in the title. Passbooks and statements for these accounts will all contain the "Scarborough" name. Skipton will also maintain a separate record of all former Scarborough saving members.

Commenting, David Cutter, deputy chief executive, Skipton Building Society, said: "We are delighted to have concluded our review of the new rules with such a positive outcome for members. This is another example of how building societies, like Skipton, are putting their members and their members' financial security first.

By achieving this confirmation; that the new rules will apply to savers who are members of both societies at the date of the proposed merger, we believe this will bring much needed clarity to the situation and give even greater protection to their money."

Changes to the rules for the FSCS came in to effect on 1 December 2008. The rules provide savers, who hold membership of both societies involved in a merger, with individual cover for £50,000 of savings (£100,000 for joint accounts) for each society, provided the enlarged Skipton Building Society continues to operate the business of the dissolved Scarborough Building Society under the name of the latter.