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Nationwide to pay £100 to 3.4 million members: Are you one of them?

Nick Cheek
Written By:
Nick Cheek
Posted:
Updated:
19/05/2023

Britain’s biggest building society Nationwide has announced it will pay £340m – £100 each – to select customer current accounts as part of its ‘Fairer Share Payment’ scheme.

Announcing its annual results today, Nationwide said the year was its “strongest on record” as its underlying profit rose from £1.6bn to £2.2bn, while its statutory profit rose from £1.5bn to £2.2bn.

The mutual has benefitted from the rising interest rate environment and earned more on lending products, with its mortgage book growing to £201.7bn.

Nationwide said it wants to continue to reinvest profits for the benefit of its members, underpinning its decision to launch ‘Nationwide Fairer Share’ – a new reward for members with the “deepest relationships”.

Who is eligible for the £100 payout?

Not all Nationwide customers are eligible for the £100 reward. The building society has highlighted a number of criteria for current account holders, savers and mortgages borrowers alike.

Essentially, members need to hold both a qualifying current account and a qualifying savings or mortgage product.

For current account holders to qualify, their account must have been open on 31 March 2023 and qualifying members must still have a current account in June. Savers need to have had £100 in total in one or more personal savings accounts or cash ISAs with Nationwide at the end of any day in March 2023.

Meanwhile, mortgage borrowers must owe the mutual at least £100 on their residential mortgage on 31 March 2023.

Nationwide will begin to inform eligible members about the payment from today.

In addition to the £100 current account payout, the mutual also launched its two-year Nationwide Fairer Share Bond with a 4.75% interest rate for existing members only. While competitive, it’s not market-leading in the two-year bond category.

According to Moneyfactscompare.com, the current top two-year fixed rate saver (4.96% AER) is offered by three providers, with varying minimum deposit requirements: Close Brothers Savings (minimum £10,000 deposit), Charter Savings Bank (minimum £5,000 deposit) and OakNorth Bank (minimum £1 deposit). However, savers can earn 5.01% on a shorter 18-month bond from HTB.

Debbie Crosbie, chief executive of Nationwide, said: “We have delivered a strong financial performance by providing banking that is fairer, more rewarding and for the good of society.

“Our strongest financial performance means that we are able to launch the Nationwide Fairer Share Payment, as well as the Nationwide Fairer Share Bond – with a highly competitive interest rate on savings for our existing members. We can do this because we’re a building society, not a bank, and our profit is reinvested for our members’ benefit.”

A volatile outlook

Despite record profits and the Fairer Share handout, Nationwide said the economic outlook was still uncertain, primarily because of increases in the cost of living and higher interest rates. The mutual noted that this led to a drop in its mortgage market activity and house prices which it expects to remain subdued in the second half of 2023.

Victoria Scholar, head of investment, interactive investor said: “[Despite] Nationwide paying customers £340 million through a £100 payment to eligible customers through their current accounts next month thanks to its building society status, it set aside £126m for potential bad loans, increasing by almost £100m year-on-year.

“The macroeconomic headwinds of sluggish growth and rampant inflation raises the risk of loans turning sour, forcing Nationwide to up its provisions in preparation.”