Savings account customers who were members of both Skipton and Scarborough building societies when the two announced that they intend to merge, will benefit from the new compensation rules introduced by the Financial Services Compensation Scheme.
Skipton and Scarborough members will be eligible for the 'double cover' offered by the FSCS for those savers who have deposits with two different savings account
providers, even if they merge to become one company, Skipton Building Society
Under the previous FSCS rules, customers could be compensated up to £50,000 for each savings account provider so long as they under a different licence.
But, since the credit crunch has seen the demise of some providers and the merging of others, it has modified the rules to offer £100,000 to customers of merged institutions, or £200,000 for joint accounts, which came into affect on December 1.
Skipton has been seeking a way of pushing the merger forward while still allowing customers of both societies to benefit from the FSCS's new rules; its solution is to transfer the savings accounts of Scarborough Building Society
to Skipton, as planned, but for the accounts to retain the Scarborough name.
"We are delighted to have concluded our review of the new rules with such a positive outcome for members." commented David Cutter, deputy chief executive of Skipton Building Society. "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."
The new rules will apply to customers of Skipton and Scarborough providing that Skipton continues to operate the business of the dissolved Scarborough under the latter's name.
© Fair Investment