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Skipton ‘reluctantly’ moves to introduce charitable assignment

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  • 01/03/2000
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Skipton Building Society has become one of the final top 20 mutual societies to introduce a charitab...

Skipton Building Society has become one of the final top 20 mutual societies to introduce a charitable assignment.

Following the move, all new investing members will have to sign away windfall rights for the next five years.

The decision was not one the board wanted to make, but felt it was appropriate as societies face mounting pressure to convert.

Mark Smitheringale, head of corporate communications, said: “Use of charitable assignments seems to have become a test of a societies’ commitment to mutuality, and in the past we have been accused of not showing our commitment to our status by not having one in place.”

The Principality Building Society of Cardiff, the 15th largest in the UK, is now the only society to not have a charitable foundation in place, but is considering implementing such a safeguard.

The Cheshire Building Society has also taken steps to protect its mutual status by introducing a charitable assignment. As a result, it can now increase savings rates by 1.5%, which has allowed it to restore the minimum opening balance to £1.

After recent attacks on its mutual status, the Chelsea Building Society is introducing a charitable assignment within the next month.

While the use of charitable assignments has now become commonplace, Carpetbagger.com has suggested that in a conversion situation they may not actually be legal. However, this has been contested by the societies.

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