Affinity savings accounts offer lifeline to football clubs

With the new football season kicking off this week Andrew Hagger of Moneynet looks at how football clubs continue to benefit from the savings habits of their devoted fans.

Many football league clubs will run out onto the pitch at start of another new season thanks in part to the ongoing financial support of their loyal supporters via affinity savings accounts.

These accounts provide a vital boost to club coffers, however devoted fans are receiving a mere pittance by way of interest for themselves.

As we approach the Football League kick off this weekend (Saturday13th August for the Premier league) football savings accounts are now on average paying the account holder a return of just 0.15%.

To put this into perspective, a footie fan with £1,500 would earn just £1.80 interest in a year after basic rate tax, whereas his club will benefit by up to £15.00 (at 1.25%)

If the saver chose to deposit their cash in the best buy instant access account paying 3.15% from Coventry BS their annual return would be a much healthier £37.80 net of tax.

It's apparent that loyal fans are prepared to forgo a far better return on their nest egg on the understanding that the bank balance of their beloved team will benefit as a result.

The average rate for a standard (non football) easy access account is 0.91%, so when you add the 0.15% the customer receives, plus the 1% - 1.25% the club receives in most cases, these accounts are paying out an above average total return.

Many clubs in the Football League from the Championship through to League Two are living a hand to mouth existence with new cases of clubs facing administration every season.

Those clubs not fortunate enough to have the backing of super wealthy overseas investors or benefit from seven figure TV payouts need all the financial support they can get.

Supporters up and down the land have been saving in ‘affinity savings accounts', in some cases for almost 15 years, and have helped pump millions of pounds into the coffers their favorite club (see details below).

Affinity accounts won't provide savers with a best buy return on their money but many supporters are happy to sacrifice a higher rate of interest in return for being able to do their bit for their team.

Britannia, Norwich & Peterborough BS and West Bromwich BS are the main providers of football savings accounts in the UK and between them have provided a valuable lifeline to clubs and, in particular, their youth academies.

Each year these providers present the football club with a cheque for up to 1.25% of the value of the combined daily average savings balance for all accounts held by its supporters.

Here's the scorecard of money raised to date:

Norwich & Peterborough BS savers have contributed over £3.3 million to Norwich City FC over the last 14 years

Ipswich Town have benefitted to the tune of over £7.2 million in support of its youth development since the launch of an affinity account with Britannia in 1998.

Since 1999 over 18,000 fans have opened Stoke City save and support accounts with Britannia, earning more than £6.7 million for the club.

Britannia has given Port Vale FC more than £2.5 million since1999 for future club developments thanks to more than 5000 fans who have signed up for an account.

Wolverhampton Wanderers have received over £700,000 since 2003, courtesy of the tie up with Birmingham Midshires.

West Bromwich BS launched the first football affinity account in 1996 for West Bromwich Albion which has since raised over £2.2 million to date.

Derby County FC has received over £2 million courtesy of affinity accounts held with Derbyshire Building Society.