READERS' LIVES: A case of cruel Britannia?

Building society membership rights ... pension compensation. Your queries answered

IN JULY 1995 our mortgage with Abbey Life was transferred to the Britannia Building Society as part of an arrangement between the two companies. Although Britannia now holds our mortgage, it has denied us membership rights. Our mortgage is run through a separate organisation, the Britannia Mortgage Company Number One Limited. Building societies, including Britannia, are emphasising the benefits of mutuality, so why should they prevent a customer having rights to membership and benefits? I have written to Britannia twice but don't feel I have received a reasonable answer.

JV, Birmingham

Don't blame us, says Britannia: "Our hands are tied". Under the Transfer of Mortgages code of practice, agreed with the Building Societies Commission in 1989, societies are obliged to make it absolutely clear that "the borrower will have no membership rights in the parent society". The letter sent to you in July 1995 did state that the transfer would "not attract borrowing members" rights in the Britannia Building Society.'

However, under the Building Societies Act 1997, societies can in future offer full membership rights to borrowers whose lender is acquired by a building society. This is not likely to come into force until the autumn. Societies may use it to extend membership to borrowers in future acquisitions of other lenders' mortgage business. But why shouldn't it be extended to all existing borrowers? You should pursue this with Britannia later in the year.

Alternatively, you could ask to have a mortgage direct with Britannia, in the same way that any borrower can remortgage. Unfortunately you would pay the usual administration and valuation costs, even though Britannia (through its subsidiary) already has all the paperwork. That seems hard to justify.

Interestingly, another aspect of the 1997 Act is that building societies will be much more restricted in their ability to offer so-called "deposit accounts" - the technical description of accounts that don't confer membership rights. Don't be alarmed: most building society savings accounts are "share accounts" and confer full membership rights. Check with your society about the status of your account.

Britannia will be writing to existing customers whose accounts only have deposit status. These will be invited to become members. For Britannia's loyalty scheme, membership will be assumed to have run from the date the deposit account was opened. That's the attitude you'd expect from a society committed to mutuality. Naturally, you'd expect the same for borrowers, so keep questioning Britannia.

Like your reader from Derbyshire (31 May) I have had trouble assessing the compensation offered on poor pension advice. My case has dragged on since 1994, and I have been unable to find an actuary in the North- west willing to look at my pension position.

PW, Lancashire

The Association of Consulting Actuaries - ACA - is aware that not all its members offer the service you want. It has compiled a list of members who will definitely look at pension compensation: ask specifically for this list. Contact the ACA, 1 Wardrobe Place, London EC4V 5AH, telephone 0171-248 3163.

The advantage of using a firm near your home or work is that you can make a personal visit if necessary, but it is quite possible to do it all through the post. So be prepared to use a firm elsewhere in the country. You may want to shop around: a more distant firm may be cheaper or offer a more appropriate service.

Like most professional services, actuaries don't come cheap. Some firms hope to get a lot of pension mis-selling work and have set up deals and special systems. For example, one firm may charge a flat fee, say pounds 150 plus VAT. It sounds a lot, but remember what's at stake.

Other actuaries may charge on a time-spent basis, in which case you should try to get a rough idea of costs first. Get all the documentation and information in an accessible form to make it as easy as possible for the actuary, to avoid any mistakes and to speed up the process.

q Write to the personal finance editor, `Independent on Sunday', 1 Canada Square, Canary Wharf, London E14 5DL and include a phone number, or fax 0171-293 2096, or e-mail Do not enclose SAEs or any documents you wish to be returned. We cannot give personal replies or guarantee to answer letters. We accept no legal responsibility for advice given.

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