Don't hang around after the windfall

During the coming week, almost 12 million members of the Woolwich and Halifax will discover exactly what the abandonment of their societies' mutual status will bring them.

In the case of the Woolwich, precise details will be known tomorrow. It is likely that the minimum value of free shares paid when and if eligible members vote for a flotation will be pounds 800, and double this amount for those who are both savers and mortgage borrowers.

In addition, some pounds 1.5bn worth of free shares will be handed out in a separate distribution based on the savings levels in members' accounts.

Halifax members may not hear until the end of the week. However, they are likely to get a similar-sized bribe.

In such circumstances, it would be senseless to argue that the principles of mutuality outweigh the hefty benefits flowing from a simple tick on a form and a swift trip to the postbox.

After all, so the argument goes, compared to a large fistful of free shares, the benefits of common building society ownership are mostly intangible and not worth defending.

This view has been so regularly repeated by so many of my colleagues in the national press that it seems almost churlish to challenge it.

Yet we should. As the Which? survey discussed on page 11 shows, it has always been possible for some members to get a far better deal than has ever been available from banks and bigger societies.

The trick has been to avoid, where necessary, the Halifax, Woolwich and Alliance & Leicesters of this world, looking instead to the National Counties, Dunfermline, Coventry and Yorkshire building societies, or specialist insurers.

Moreover, the survey demonstrates that shopping around pays dividends - pounds 6,300 over five years, for a family with typical financial commitments.

Which brings us to the big question of 1997: given that the flotation votes are foregone conclusions, what will you do when you receive the bonanza?

The societies that are floating hope you will behave in the typical manner - stay put with them through inertia.

The hassle of changing bank accounts, diverting standing orders and direct debits, shopping around for new buildings and contents cover, arranging new mortgages and other loans, and all the rest sometimes appears to deliver very little reward.

That may be so for each individual change you make. But adding an average of pounds 100 to your monthly pay packet is no mean pay-off for obtaining and acting on a few financial quotes. When was the last time your pay rise came to that much?

AFTER touting the benefits of shopping around, it may seem contradictory that this column should then advise you to be careful when it comes to prospective PEP purchases.

As our article on page 12 reveals, "execution-only" brokers are poised to clean up in the next few months by offering supposedly unbeatable deals on personal equity plans.

So what is there to worry about? If you are a sophisticated investor and the PEP you want is the one on sale through a discount broker - nothing.

You may, however, find that the PEP you want is not available, usually because it does not pay trail commission to the broker, and you are steered instead to a "similar" investment.

If you are not sure what kind of PEP you really want, whether a "similar" PEP is just that, or even whether a PEP is the right investment for you, talk to an independent financial adviser. By all means negotiate a discount. But remember, shopping around also means being prudent with your money, not just chucking it at the first investment that moves.

q Steve Lodge is away.

Sport
premier leagueLive: All the latest news and scores from today's matches
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
News
Queen Elizabeth II sends the first royal tweet under her own name to declare the opening of the new Information Age Galleries at the Science Museum, South Kensington, London
media... and the BBC was there to document one of the worst reactions
News
politics
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Luis Suarez and Lionel Messi during Barcelona training in August
footballPete Jenson co-ghost wrote Suarez’s autobiography and reveals how desperate he's been to return
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
newsSam Smith’s Mobo triumph is just the latest example of a trend
News
Laurence Easeman and Russell Brand
people
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker