YBS offset mortgage facilities removed – Financial Ombudsman success

markBJ

I wanted to share this in case anyone else has a Yorkshire Building Society offset mortgage and is affected by the removal of banking facilities from the offset savings account. This may affect other YBS offset mortgage customers, depending on their product and how they use the account.

My case did not go to a published ombudsman final decision. It was resolved at senior investigator mediation stage after the Financial Ombudsman Service became involved, and consequently the result will not be published on their website. There was no confidentiality requirement in my correspondence, so I thought it was important to share my experience directly.

To be clear, the offsetting part of the mortgage is unaffected. The issue is that the ability to use the offset savings account as a main transactional account is being removed. I have used mine in that way for many years.

YBS wrote to me in January 2026 to say that from June 24th 2026 they would remove Direct Debits, standing orders, LINK card access and related payment functionality from my offset savings account. They offered £300 compensation for the inconvenience. In fact, the £300 was credited to my savings account before I received the letter.

I complained because I use the offset savings account as my main transactional account. My salary is paid into it and household payments go out from it. Removing Direct Debits and standing orders means I now have to operate a separate current account and keep a permanent working float outside the offset account, which reduces the effectiveness of the offset facility.

My mortgage is a legacy interest-only offset tracker, so moving mortgage was not a realistic like-for-like solution - not to mention the costs involved. I argued that this was not just inconvenience, but a permanent reduction in the practical effectiveness of the offset mortgage.

YBS initially maintained that the £300 compensation was sufficient. I referred the complaint to the Financial Ombudsman Service. The senior investigator negotiated an additional payment of £2,250 from YBS, on top of the original £300. I have now received the £2,250.

So total compensation was £2,550.

The £2,250 figure was based on the estimated cost of having to keep around £10,000 outside the offset account for the remaining mortgage term, instead of having it offsetting the mortgage.

I’m posting this because it shows that complaining to the Ombudsman can work. If you are in a similar position, don’t assume the initial compensation offer is the end of the matter. Explain clearly how you use the offset account, how much working balance you now need to hold elsewhere, and why that reduces the value of the offset facility.

Timeline below:

TLDR; Around 3.5 months from sending complaint to FOS to compensation being paid.

29/01/2026 - Letter received from YBS notifying removal of DD, Standing Orders, Link Card and International Payments in June 2026. I also found out that £300 has already been deposited into my savings account as compensation.

30/01/2026 - Formal complaint raised with YBS, stating that I did not accept the £300 as settlement and would be considering my position. This started the complaints process.

12/02/2026 - I sent a follow-up email outlining my objections in detail.

12/02/2026 - Later the same day, YBS sent its final response maintaining that £300 was sufficient compensation.

03/03/2026 - Submitted complaint to the Financial Ombudsman Service online and received auto-acknowledgement.

18/05/2026 - First response from senior investigator saying they are investigating my complaint, summarising the issue and providing direct contact details. I'm given the opportunity to provide any further detail regarding the complaint.

22/05/2026 - I responded with further detail about the financial impact, including the need to maintain a working float outside the offset account.

10/06/2026 - Senior investigator emails to say YBS agree to pay £2250.

14/06/2026 - I replied to clarify that the £2250 should be in addition to the original £300 inconvenience payment.

15/06/2026 - Investigator confirmed that YBS had agreed to pay the full £2250 and I accepted.

20/06/2026 - £2250 compensation received

Hehaw2025

Great result and well done.

silvercar

Well done!

Any explanation of how the compensation figure was calculated? How long do you have left to run on the mortgage?

markBJ

This is how I calculated the financial detriment which I proposed as a settlement to the investigator:

Current interest rate: 4.5%
Term remaining: 5 Years

Float required in external account: £10k

10000 x 0. 045 x 5 = £2,250

markBJ

Follow up: I called the investigator to thank him for reaching an amicable conclusion this morning. I found out there are indeed other complaints in flight and that he will be dealing with all of them, plus any future complaints.

Good news for anyone else who wants to raise a complaint as he’s done a great job and has a thorough understanding of the situation.

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82043445#Comment_82043445

A love the simplicity of that calculation. That’s a generous settlement. I’m surprised YBS didn’t put forward a calculation that was lower.

Also, pleasantly surprised that the adjudicator understood offset mortgages, they don’t always get it.