Find out what this week's big merger announcement means for your money.
The big news for your banking this week is the announced merger of the Yorkshire and Chelsea building societies.
While the move doesn't quite have the drama of the 'emergency takeovers' that have become increasingly common since the start of the credit crunch, there is no doubt that this merger will have a significant impact on your finances, whether you're a customer or not.
Why are they merging?
Both parties have stressed that this is a strategic business move rather than a heroic rescue. That said, the Yorkshire (known to be the more sturdy of the two) is likely to bring more to the partnership than the Chelsea after its well publicised difficulties with worthless Icelandic investments and buy-to-let mortgage scandals.
Regardless, the two societies will merge to secure a place as the UK's second largest building society - giving the Nationwide a run for their money.
While there is no doubt that the merge will strengthen both parties' position in the UK market (something that will no doubt help to give their members peace of mind), it does mean that our options will once again be reduced as the consumer finance sector continues to shrink.
Not least because both parties have already been involved in high profile takeovers in the last 18 months, with the Yorkshire building society swallowing up the Barnsley BS and the Chelsea 'becoming one' with the Catholic building society last year.
But while news of yet another merger can seem like water off a duck's back, what does it actually mean for you and your finances?
1. What will they be called?
Plans announced so far suggest that while together the two parties will be referred to as the "Yorkshire Building Society" post-merger, the Chelsea building society will be retaining both its branding and presence on UK high streets.
2. What will it mean for my banking?
Initially at least both building societies will be maintaining their individual product ranges. This means that your day to day banking won't be affected in the near future if you're an existing or potential customer. It is however possible that they may merge their product offering at some point in the future.
3. What will it mean for my mortgage?
If you hold a mortgage with either the Chelsea or the Yorkshire building society you should continue to make repayments as you do now as your current deal won't be affected.
4. What will it mean for my savings?
As it stands, existing customers with savings in merged building societies will continue to have their money protected under separate compensation schemes until at least 30th December, 2010. This means that up to £50,000 of your savings in each institution (£100,000 in total for each individual) will be protected under the FSCS (Financial Services Compensation Scheme) should anything untoward happen.
It is possible that this merger protection will be extended past the end of 2010 but we'll bring you more information as and when we hear anything.
5. What will happen to my local branch?
As with any merger it's likely that job cuts and branch closures will be made. That said, both brands want to maintain their presence on UK high streets and as such are initially only planning to make closures in towns and cities where the Yorkshire and the Chelsea have branches in close proximity - 11 locations have been identified initially.
6. Will I get a payout?
As both building societies are trying to conserve cash as a means of cementing their future, members of either institution will not receive anything in the way of a windfall payout when the merger takes place.
7. Do I get a say?
Unlike a number of recent mergers that have gone ahead without going to the public vote, members do get a say in whether or not this deal will take place.
Although both parties are confident that the merger will proceed without issue, they do still need 50% of their voting borrowers and 75% of voting savers to give it the green light.
As such, if you're a member of either building society you'll receive a letter and a voting form within the next week or so. This will explain your options and detail the plans of the merger. You will then be asked to vote, either by proxy or in person at the general meetings that will be held in January.
8. When will the merger happen?
If building society members give the deal the go-ahead the merger is scheduled to take place in April next year.
