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The information Natiowide and Portman did not want you to have
Nationwide_Carperbagger
Posts: 1 Newbie
Last week the FSA gave its final seal of approval to the merger of Nationwide Building Society and Portman Building Society. Buried deep in the "Decision Notice" was information that Nationwide and Portman were desperate to keep quiet. The full document can be read here:- http://www.fsa.gov.uk/pubs/other/Portman_Nationwide.pdf
The part we are interested in is contained in section 4.5. They even admit to trying to keep it quiet. At the end of the document they were censured by the FSA for doing this.
For many years, any new customers taking a Nationwide product have had to sign away for life all rights to a windfall if Nationwide converted to a bank. They call this a "Charitable Assignation." Portman also had a "Charitable Assignation" but unlike Nationwide theirs only last for 5 years. Below I will describe how you can use the difference to carperbag Nationwide and circumvent their charitable assignation.
To make things a bit easier to understand I'll use some scenarios:-
Scenario 1
Fred has been a Portman member for more than 5 years. His charitable assignation has lapsed, meaning that if Portman had converted to a bank rather than merged, he would still have received a windfall bonus. Fred has NO Nationwide products.
When the merger completes Fred becomes a member of Nationwide. Under the Building Societies Act Fred’s Portman membership rights are carried over. This means that as Fred is outside of his charitable assignation period and he WILL NOT be bound by Nationwide’s charitable assignation! This is confirmed in the response given by Nationwide and Portman in section 4.5.
In addition, if Fred chooses after the merger to take out new Nationwide products he WILL NOT be required to sign up to the Nationwide's charitable assignment scheme.
Scenario 2
Jane has been a Portman member for 2 years. Her charitable assignation is still in force for another 3 years. Unlike Fred, if Portman had converted to a bank rather than merged, she would NOT have received a windfall bonus. Jane has NO Nationwide products.
When the merger completes Jane becomes a member of Nationwide. Under the Building Societies Act her Portman membership rights are carried over. This means that Jane’s charitable assignation period is carried over and should Nationwide convert before it ends (i.e. in the next 3 years) she will lose her right to a windfall. However, should they convert after her assignation period ends she WILL be entitled to a windfall.
In addition, like Fred, if Jane chooses after the merger to take out new Nationwide products she WILL NOT be required to sign up to the Nationwide's charitable assignment scheme as she is bound by Portman’s for the remaining 3 years.
Scenario 3
Barney has been a Portman member for more than 5 years. His charitable assignation has lapsed, meaning that if Portman had converted to a bank rather than merged, he would still have received a windfall bonus. Barney has a number of Nationwide products (i.e. he is a member of both Societies.) that he took out after the Nationwide charitable assignation came in to force and therefore has signed away all rights to a windfall
When the merger completes Barney loses his Portman membership but as he is already a Nationwide member he is bound by the terms of his existing Nationwide membership. This means that even though Barney is outside of his Portman charitable assignation period he will be bound by Nationwide’s charitable assignation. However, he CAN do something about this.
By closing all his Nationwide accounts before the merger takes place (28th August), on the merger date he will only be a Portman member and his Portman charitable assignation period will take precedent. He will be in a very similar position as Fred. There is one caveat around this. The Nationwide assignation remains in place for 2 years after his membership ends so he would not receive a windfall if they converted within two years of him closing his accounts.
Like Fred and Jane he is then free to open new accounts with Nationwide but he will now be free of the charitable assignation.
Scenario 4
Anne is not currently a member of either Portman or Nationwide. If she opens an account with Nationwide she will be bound by the lifetime charitable assignation, meaning that if Nationwide convert to a bank she will not receive a windfall. However, there is a way around this.
If she opens any type of Portman account (she will have to do it before 28th August) with a minimum balance of £250 she instantly becomes a member. Although she will not qualify for the Portman windfall bonus she will become a Nationwide member with her Portman charitable assignation; 5 years. Again this means that if Nationwide convert to a bank within 5 years she won’t get a windfall but once the 5 years are up she will be free from the assignation.
Like the others, if Anne chooses after the merger to take out new Nationwide products she WILL NOT be required to sign up to the Nationwide's charitable assignment scheme as she is bound by Portman’s for the remaining 5 years.
So in summary:-
The part we are interested in is contained in section 4.5. They even admit to trying to keep it quiet. At the end of the document they were censured by the FSA for doing this.
For many years, any new customers taking a Nationwide product have had to sign away for life all rights to a windfall if Nationwide converted to a bank. They call this a "Charitable Assignation." Portman also had a "Charitable Assignation" but unlike Nationwide theirs only last for 5 years. Below I will describe how you can use the difference to carperbag Nationwide and circumvent their charitable assignation.
To make things a bit easier to understand I'll use some scenarios:-
Scenario 1
Fred has been a Portman member for more than 5 years. His charitable assignation has lapsed, meaning that if Portman had converted to a bank rather than merged, he would still have received a windfall bonus. Fred has NO Nationwide products.
When the merger completes Fred becomes a member of Nationwide. Under the Building Societies Act Fred’s Portman membership rights are carried over. This means that as Fred is outside of his charitable assignation period and he WILL NOT be bound by Nationwide’s charitable assignation! This is confirmed in the response given by Nationwide and Portman in section 4.5.
In addition, if Fred chooses after the merger to take out new Nationwide products he WILL NOT be required to sign up to the Nationwide's charitable assignment scheme.
Scenario 2
Jane has been a Portman member for 2 years. Her charitable assignation is still in force for another 3 years. Unlike Fred, if Portman had converted to a bank rather than merged, she would NOT have received a windfall bonus. Jane has NO Nationwide products.
When the merger completes Jane becomes a member of Nationwide. Under the Building Societies Act her Portman membership rights are carried over. This means that Jane’s charitable assignation period is carried over and should Nationwide convert before it ends (i.e. in the next 3 years) she will lose her right to a windfall. However, should they convert after her assignation period ends she WILL be entitled to a windfall.
In addition, like Fred, if Jane chooses after the merger to take out new Nationwide products she WILL NOT be required to sign up to the Nationwide's charitable assignment scheme as she is bound by Portman’s for the remaining 3 years.
Scenario 3
Barney has been a Portman member for more than 5 years. His charitable assignation has lapsed, meaning that if Portman had converted to a bank rather than merged, he would still have received a windfall bonus. Barney has a number of Nationwide products (i.e. he is a member of both Societies.) that he took out after the Nationwide charitable assignation came in to force and therefore has signed away all rights to a windfall
When the merger completes Barney loses his Portman membership but as he is already a Nationwide member he is bound by the terms of his existing Nationwide membership. This means that even though Barney is outside of his Portman charitable assignation period he will be bound by Nationwide’s charitable assignation. However, he CAN do something about this.
By closing all his Nationwide accounts before the merger takes place (28th August), on the merger date he will only be a Portman member and his Portman charitable assignation period will take precedent. He will be in a very similar position as Fred. There is one caveat around this. The Nationwide assignation remains in place for 2 years after his membership ends so he would not receive a windfall if they converted within two years of him closing his accounts.
Like Fred and Jane he is then free to open new accounts with Nationwide but he will now be free of the charitable assignation.
Scenario 4
Anne is not currently a member of either Portman or Nationwide. If she opens an account with Nationwide she will be bound by the lifetime charitable assignation, meaning that if Nationwide convert to a bank she will not receive a windfall. However, there is a way around this.
If she opens any type of Portman account (she will have to do it before 28th August) with a minimum balance of £250 she instantly becomes a member. Although she will not qualify for the Portman windfall bonus she will become a Nationwide member with her Portman charitable assignation; 5 years. Again this means that if Nationwide convert to a bank within 5 years she won’t get a windfall but once the 5 years are up she will be free from the assignation.
Like the others, if Anne chooses after the merger to take out new Nationwide products she WILL NOT be required to sign up to the Nationwide's charitable assignment scheme as she is bound by Portman’s for the remaining 5 years.
So in summary:-
- If you are a Portman only member you become a Nationwide member that is either assignation free or with the remainder of your Portman assignation.
- If you are a Nationwide and Portman member, close your Nationwide accounts before 28th August to carry over your Portman assignation/lapsed assignation.
- If you are neither a Nationwide or Portman member and feel like carpetbagging the biggest Building Society in the UK get down to your local Portman branch and open an account. You can also phone them on 0845 845 7000 or 0845 60 90 600. You can’t open an account over the phone but they will send you an application form. Alternatively, you could download a application form from their website - http://www.portman.co.uk/savings/apply.asp
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Comments
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i'm just about to take on a nationwide mortgage after coming off portman for a new house (not a mortgage transfer as these were 2 separate transactions),,,, anything crafty i can do in the meantime? I currently dont have an account with either and will probably have a nationwide mortgage account in about 3 weeks - are you talking here about current and savings accounts? Shall i open a portman savings account or something?I never missed a payment :T , I paid off all my credit cards :T , I paid of all my loans :T , i have a work mobile :T - but am now "medium" credit risk
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If any one wants to call Portman without using the rip off 0845 numbers this is the geo number:- 01202 292444
There is also a CALL BACK facility on their website,(click on the "Call Me button on the left hand side menu), whereby they will call you back therefore saving the cost of the call completelyDon`t steal - the Government doesn`t like the competition0 -
My eldest Son has had a Portman account for 4 years..my youngest for 18 months.
I asked the Portman when all this merger stuff started whether they'd get a windfall and have an email saying "Yes".
Are you saying that if the merger went ahead tomorrow then neither of them would get anything?0 -
No, that's not what he's saying at all.
Both of your sons should already have had documentation from Portman regarding their merger entitlements which will be paid out when the merger happens on 28 August.
The original post here is about what would happen if/when NATIONWIDE converts, not when Portman & Nationwide merger.0 -
This looks like a good speculative way of investing £250...will just have to put up with 1.6% interest 'for ever'0
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You don't have to put up with 1.6% forever at all.
You can open an instant access account with Portman and then switch to any other Nationwide account after the merger takes place later this month. Nationwide have many accounts paying more than 1.6%.
You can also reduce the balance to £100 as soon as you've opened the Portman account with £250, so it's only £100 that you are losing a bit of interest on.0 -
Great stuff, thanks!0
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i just wanted to say that is one of the clearest and informative posts i have ever read (with no disrespect to any other posts i have evr read on here!) and is a truly amazing first post.
thank you, and welcome to the site.
xx"It is not uncommon for slight acquaintances to get married, but a couple really have to know each other to get divorced." - Anonymous
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MarkyMarkD wrote: »You don't have to put up with 1.6% forever at all.
You can open an instant access account with Portman and then switch to any other Nationwide account after the merger takes place later this month. Nationwide have many accounts paying more than 1.6%.
You can also reduce the balance to £100 as soon as you've opened the Portman account with £250, so it's only £100 that you are losing a bit of interest on.
I'm just wondering why the balance has to be £100?0 -
This is the minimum amount required in a Nationwide savings/current account to qualify for a bonus/vote at the agm etc as a qualifying member. Im not sure why its £100 exactly though. Its been £100 for as long as I can remember. Portman have a minimum balance of £250 to open an account, hence the figure is £250 in that case.
Jo x#KiamaHouse0
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