Question
I just wondered if you had any thoughts on building society windfalls?
I have had a few and still have several accounts with £100 or so. As you know there have been de-mutualisations but no windfall. This might not be your area but any advice is welcome.Answer
Building society windfalls tend to be paid when a society either demutualises, by converting to a bank and listing on a stock exchange, or is taken over.
Demutualisation’s have unsurprisingly been absent in recent times as many building societies struggle to simply keep their heads above water. And those that are sufficiently robust to float won’t be keen to consider such a move while stockmarkets are in the doldrums.
There have been some takeovers over the last couple of years but the only one to pay a windfall was when the Catholic BS was taken over by the Chelsea BS in 2008. By and large the building societies that have been taken over were in poor financial health, so weren’t in a position to negotiate a windfall for members.
Assuming the economy improves over the next few years then we might start to see a few healthier building societies become takeover targets, in which case windfalls might be on the cards once more. But for the time being any takeovers will likely remain distress sales, so the prospects for windfalls remain slim.
If you only have a £100 or so in each account and don’t mind the paperwork then staying put isn't a bad idea and might yield a windfall or two over the next 5 years or more. Just double check that the accounts confer membership status, otherwise it’s unlikely you’ll qualify. Good luck, but don’t hold your breath!
I just wondered if you had any thoughts on building society windfalls?
I have had a few and still have several accounts with £100 or so. As you know there have been de-mutualisations but no windfall. This might not be your area but any advice is welcome.Answer
Building society windfalls tend to be paid when a society either demutualises, by converting to a bank and listing on a stock exchange, or is taken over.
Demutualisation’s have unsurprisingly been absent in recent times as many building societies struggle to simply keep their heads above water. And those that are sufficiently robust to float won’t be keen to consider such a move while stockmarkets are in the doldrums.
There have been some takeovers over the last couple of years but the only one to pay a windfall was when the Catholic BS was taken over by the Chelsea BS in 2008. By and large the building societies that have been taken over were in poor financial health, so weren’t in a position to negotiate a windfall for members.
Assuming the economy improves over the next few years then we might start to see a few healthier building societies become takeover targets, in which case windfalls might be on the cards once more. But for the time being any takeovers will likely remain distress sales, so the prospects for windfalls remain slim.
If you only have a £100 or so in each account and don’t mind the paperwork then staying put isn't a bad idea and might yield a windfall or two over the next 5 years or more. Just double check that the accounts confer membership status, otherwise it’s unlikely you’ll qualify. Good luck, but don’t hold your breath!
Read this Q and A at http://www.candidmoney.com/questions/question142.aspx
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