FinancialAdvice.co.uk Logo

Qualified advisers answering your
Financial Questions
call 0800 092 1245

Savings protection scheme takes toll at Nationwide Building Society

In a further reflection of the growing unease in the building society sector it was today revealed that the Nationwide Building Society has taken a £241 million exceptional charge for its share of the Financial Services Compensation Scheme. Designed to offer a safety net to retail sales in the UK the system appears to be somewhat out of sync can and accounted for a 69% fall in pre-tax profits to £212 million. When you arrive at a situation whereby over half of your profits are eaten up by premiums to the savings protection scheme perhaps it is time to review the system?



The problem, according building society representatives, is the fact that the premiums paid are based upon funds held on deposit, rather than taking into account the safer environment of the building society sector. It appears as though companies such as the Nationwide pay the same percentage premium as banking institutions which may well take significantly greater risks with their assets. So in effect we are seeing the more conservatively run financial institutions of the UK forced to bail out their riskier counterparts.



Unfortunately, it seems unlikely that the Financial Services Authority will amend the terms in the short to medium term but surely a longer term review is called for.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:



Latest News

Blogs

Helpful new tax year facts that could affect you and your money


Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.


Read more

Useful Links

Popular Searches

Please Enter More Details

 
Enter More Details
Continue