Skipton Building Society Questions and Answers

ultrawomble

moneedope wrote: »

I won't have the cash free for the regular saver account till next week (3rd Dec) so should i follow ultrawomble's system and wait for the end of next month or should i just open it next week??? I'm really confused now. How much would I gain by waiting to the end of the month? I pay normal tax.

OK. Let's start with the numbers (assuming you pay in £500/month and get 5% for the entire 12 months until maturity):

Option 1
If you open the account with the 1st payment on the 3rd Dec 2010, and then make monthly payments on the 1st day of the month for the succeeding 11 months (i.e. 1st Jan 2011, 1st Feb 2011, 1st March 2011 etc.) then on account maturity on 03/12/2011 you should receive roughly £130.37 net (after 20% tax).

Option 2
If you open the account with the 1st payment on the 31st Dec 2010, and then make monthly payments on the 1st day of the month for the succeeding 11 months (i.e. 1st Jan 2011, 1st Feb 2011, 1st March 2011 etc.) then on account maturity on 31/12/2011 you should receive roughly £147.29 net (after 20% tax).

As you can see, if you open the account at the end of the month you'll be roughly £17 better off in net interest.

To better it, you'll need to find an account that will make you in excess of £17 net in a month from £500.

Those are the simple numbers.

However, you have to bear in mind that the account might not be on offer in 4 weeks time from 3rd Dec 2010. That's the gamble. Also, it's over the Christmas period...... But it is also a gamble given that the interest rate is variable rather than fixed - so it might go down......

andypandy1

As far as I understand it, based on advice given to me in branch and given Caroline's earlier post, option 2 is not actually an option as the account works on a monthly anniversary basis rather than by calendar months. What you suggest is therefore not possible unless someone can confirm that advice from Skipton is not in fact correct.

geepster

Hi Caroline,
I have a Skipton Websaver account and have just noticed that the interest rate has reduced from 2.60% gross to 2.40%.
I don't remember being informed of this change so do you advise account holders of interest rate changes? (I may have missed it of course).
As a matter of interest, why has the rate been reduced because the base rate hasn't changed.
I know it's not a huge amount but we need to earn as much as we can these days.
Thanks.
geepster

calypso_rhapsody

Thanks Clare for your response. I dare say we could go back and forth on this but i would restate my point that your helpdesk did not point out to me that there was a way to avoid the £50 charge - i managed to spot the way to halve it but not the way to eliminate it (but i'll know next time ...).

I take your point that your whole range of products is available to maturing bondholders and indeed i opened an online bond with the intention of moving the funds from the maturing bond there - but that plan was scuppered when you closed the online bond to additional funds ... so i transferred money in from elsewhere and now need the maturing funds to replace that money.

It feels like a game of chase me charlie - how anyone who has a job as well as savings is expected to play the game i have no idea! And the winner is Skipton who now have £25 of my money that i don't really feel they are entitled to....... but at least it's not £50!

SnowMan

We still don’t know if account works by calendar month or monthly anniversary of opening.

The terms (both website and the paper version) talk about monthly subscriptions so unfortunately are ambiguous. I read it as calendar month but was aware you could read it as months starting on the monthly anniversary of opening the account.

That is why I asked Skipton when in branch opening the account, and was told that it was OK to set up a standing order for the 3rd of each month having opened the account on the 25th November (so 2nd payment on 3rd December and last payment on 3rd October). So calendar month - see post 72.

Psychic teabag was told via the e savings login (see post 102) effectively that it was calendar month also.

Others who have had previous versions of the account say it works on calendar months.

Caroline said in post 14 that it was calendar month.

So when Caroline said in post 69 that it was monthly anniversary of opening a number of us queried this see posts 71,72 and 102. However we have had no response to these questions.

The internet terms and conditions (and the paper version) both need to be changed to clarify the position (i.e. to specifically say monthly anniversary or calendar month).

At the moment you can only guess whether it is calendar month or monthly anniversary of opening. No wonder branch staff have given different answers, no wonder Caroline has given different answers, and no wonder most of us on this thread still don’t know.

It is 1st December tomorrow and what Skipton’s systems actually do may answer the question. If it is monthly anniversary sadly there will be a lot of people querying why they were given wrong information.

Shame as had got a good vibe about Skipton while opening the account.

MarkFromCornwall

It's good to see Skipton helping people here.

Having recently opened a Regular Saver can I suggest you make it easier to find the sort code/account number for paying in. For example it could be included with the account number on the welcome letter and it would be handy to have it in the passbook.

To see what I mean, go to your home page and type sort code into the search box. The results aren't very relevant are they?

I do have the sort code now, thanks to others here whose search powers are better than mine, so this is just a suggestion for the future.

Regards,
Mark.

calypso_rhapsody

Seems as if i may get my money back with no fee after all!! But sadly that's not good news.

I do hope that Skipton will be able to work out who i am from this post - as they singularly failed to transfer the funds as instructed yesterday (i hope it is just me and my husband and not lots of others affected). I phoned yesterday afternoon to find out what was happening - the very pleasant lady who answered my call (named Clare so perhaps your good self) was unable to tell me as the systems are only updated overnight. She undertook to get someone to call me this morning.

And so Kelly did ring just after 9.30 - she confirmed the payment had not been made but said it would be done today and that the fee would be waived. I emailed her the instruction letter as she'd not got it, though couldn't say if it had been received. But the funds have still not reached my bank ....

So i called Skipton again - and am awaiting a call back - must say i do like your call-back system, if i were hanging on the end of a line listening to interminable 'your call is important to us ....' messages i would be really livid instead of mildly irritated and a little worried.

And i do appreciate that you have been suffering with the snow up there!

SnowMan

Yes from the silence I suspect Caroline is snowed in there.

My second £500 contribution will be drifting into the regular saver account tomorrow. Hopefully it will settle there and not be returned. We shall see.

calypso_rhapsody

Glad to report that the funds have reached my other account!

Rollinghome

Saver accounts are quite useful for the purpose intended, that is making small savings of no more than the allowed maximum from a salary each month. As withdrawals aren’t allowed, there still has to be another account, preferably paying interest with a sufficient balance for unscheduled payments. Anyone saving more than the maximum would also need the second interest paying account for the surplus. Savers pay a decent rate on small sums.

But… for anyone who isn’t saving as such but intends just to transfer money from another savings account they might be disappointed with the very small amount of extra interest involved for the hassle of dribbling money in once a month rather than making just a single lump-sum transfer.

Making the maximum transfer of £500 a month the average balance for the year will be just £3000. If that money comes from an account such as Lloyds Vantage paying 4% then they’ll get just 0.8% extra interest after basic rate tax.

For the maximum sum allowed that's less than 50p a week, enough to buy one cheap coffee in a paper cup per month. If the transfer is from an account paying only 3% then it could stretch to a decent cup of coffee per month – despite worrying endlessly about the timing.

Unfortunately, in reality, it’s likely to be even less than that.

Every time money is transferred from another account then interest is likely to be lost in the transfer. If this saver account allows faster payments in and the money is in an account that allows faster payments out then the loses may be small but if the money is in an account where it takes 3-4 days to transfer, or 5-6 days over a weekend then the loses will be significant. Even worse if transfers can only be to one nominated account and have to be transferred again from there.

At the end of the year, all the money will need to be transferred out losing more interest so the arrangements for doing that and how much will be interest is lost is important.

The reason why interest lost in transfers is more significant with regular saver accounts is because money transferred in will only be in the account for an average of just six months. The last payment will be there for only a matter of weeks. Up to half of the interest for the last transfer could be lost.

ultrawomble wrote: »

Option 1
If you open the account with the 1st payment on the 3rd Dec 2010, and then make monthly payments on the 1st day of the month for the succeeding 11 months (i.e. 1st Jan 2011, 1st Feb 2011, 1st March 2011 etc.) then on account maturity on 03/12/2011 you should receive roughly £130.37 net (after 20% tax).

Option 2
If you open the account with the 1st payment on the 31st Dec 2010, and then make monthly payments on the 1st day of the month for the succeeding 11 months (i.e. 1st Jan 2011, 1st Feb 2011, 1st March 2011 etc.) then on account maturity on 31/12/2011 you should receive roughly £147.29 net (after 20% tax).

As you can see, if you open the account at the end of the month you'll be roughly £17 better off in net interest.

To better it, you'll need to find an account that will make you in excess of £17 net in a month from £500.

Those are the simple numbers.

It's not financial alchemy exactly. By making £500 payments back to back the effect is just to have an extra £500 sitting in the account throughout the period - which unsurprisingly you'll get paid interest on.

But unless you specify and deduct the amount of interest lost on that extra £500 that could have been earned elsewhere that year then your “gain” is meaningless. Had the £500 stayed in a Lloyds Vantage account at 4% it would have earned £20 or £16 net that would need to be taken into account. While the initial £500 is sitting in the lower paying account from 3 Dec to 30 Dec there will be another small loss to be taken into account.

The account opened on the 3 Dec 2010 would mature on 3 Dec 2011 and your £6000 would then be able to earn further interest elsewhere for the rest of that month in whatever deals are available in a year’s time. With the account opened on 30 Dec 2010 the £6000 will have to sit there until the end of the month. And of course you do need to take into account all the interest lost during transfers for money that will be in the account for only a very limited period.

If you think a cup of coffee a month is worth the hassle, let alone the arithmetic, then this could be just the account for you, but don't expect too much.