Q: Do I qualify?
A: Our table (below) lists which accounts and customers qualify, and which do not. The key was to be a customer by the end of last year.
Q: How much will the windfall actually be worth?
A: The pounds 800 figure is only an average, and an estimated one at that. It comes from dividing the Alliance & Leicester's possible stock market value - pounds 2.5bn - by the number of qualifying customers - 2.5 million savers and 500,000 mortgage borrowers. If you are both a saver and borrower you stand to get two lots of free shares.
The minimum handout for anyone who qualifies is likely to be for shares worth at least pounds 500. The other pounds 300 a head might be doled out according to savings (or mortgage) balance, or according to how long people have been customers. But the possibility of such a variable bonus is only a guess. The Alliance & Leicester has not yet said whether the share handout will be at a flat rate, with everyone getting the same amount, or whether there will be a basic and account-related entitlement.
In addition, because the windfall is in the form of shares, there is no fixed value. As with all shares, their value will depend on what price the stock market puts on them when they start trading. And once on the stock market, dividends will probably be paid and the shares will rise or fall like other shares. Anyone who hung on to their free Abbey National shares, for example, has seen the value of their windfall enhanced by the shares' strong outperformance of the stock market since 1989.
Q: When will I get the shares?
A: Early next year is the plan, when the society joins the Stock Market as a medium-sized bank in the FT-SE 100 index of blue chip shares.
Q: Can I touch my savings?
A: Difficult to say - the society is not being very helpful on this one. It will not say to what degree savers might reduce their entitlement if they take money out of their accounts now. Until the society announces the details of any bonus share distribution and any further qualifying dates for that bonus - and the details of the scheme will not be released until later this year - savers are in the dark. Cynics might say the society is delaying coming clean so that it can keep savers locked into poor interest rates.
What the society has said so far is simply that to qualify, your total savings balance, 56 days before the voting date, must be more than pounds 100, or your mortgage debt must have been pounds 100 last 31 December and still be so on the voting date.
Q: What about "carpetbaggers"?
A: When the Woolwich announced its switch to bank status last month, its chief executive, Peter Robinson, almost seemed to relish excluding people who had opened accounts this year from the windfall, dubbing them "carpetbaggers".
Alliance & Leicester has also excluded people who opened accounts this year. It claims the number of people who might have hoped for windfalls but have been excluded is "minimal", but this may still run into thousands. In December the society stemmed the speculative tide by closing its instant access account and requiring new savers to put in pounds 5,000 (pounds 1,000 for a Tessa) to open an account. It followed this, after the Woolwich windfall announcement last month, by barring the opening of new accounts carrying "share" status - those that carry voting and membership rights and therefore are most likely to qualify for windfalls.
Q: How does this deal compare with others?
A: It's quicker, inasmuch as you should get your shares sooner than those from the Halifax and Woolwich building societies - the Halifax is pencilled in for summer 1997 and the Woolwich for autumn 1997.
The Alliance & Leicester deal is not as lucrative as when the Cheltenham & Gloucester building society was taken over by Lloyds Bank - when savers were paid an average of pounds 2,200 in cash.
Since we do not yet know the details of the share allocation, it is difficult to make a full comparison with the other share deals - but on average they are all likely to be worth pounds 800 or so. For windfall watchers, shares worth at least pounds 500 would make it a fairly standard deal. And for those who have qualified with balances of just pounds 100, that is a fabulous investment return.
However, the Alliance & Leicester deal excludes a greater proportion of its customers - 2 million out of 5 million - than any other of the big deals announced to date. This is because it owns Girobank, whose customers are not members of the society and do not qualify. Girobank operates through post offices and issues giro cheques to millions of social security claimants.
Q: What happens next?
A: Letters went out last week from the Alliance & Leicester to customers explaining its proposed changes and enclosing a leaflet called Alliance & Leicester conversion: some questions answered. There is also a helpline on 0345 221144. You do not have to do anything for now, although it might be advisable for savers to ensure their savings total pounds 100 with the society.
The Alliance & Leicester expects to publish details of the share distribution later this year. This will be sent to members, along with an invitation to vote on the proposals. The vote is planned for later this year, to be followed by the share handout early next year.
Q: Who is next?
A: Some analysts think this may be the last windfall announcement for some time. Five of the biggest building societies have now declared in recent times - Halifax and Leeds (which merged), Woolwich, Alliance & Leicester, National & Provincial, and Cheltenham & Gloucester. The Nationwide is the only remaining society that analysts consider big enough to become a bank on its own. But it seems more committed to remaining a building society and will announce rate improvements for savers and borrowers in the spring as part of a loyalty bonus.
A number of societies remain takeover targets, however. The A&L might even take over a society before its own share handout, allowing customers of the swallowed society effectively to join in the A&L share deal.
One potential takeover target, Bristol & West, said last week it continued to review its position and does not rule out coming up with a windfall deal, while the Woolwich is reported to be interested in buying the Britannia. In each case the savers and borrowers of any society that was bought would stand to receive a windfall.
Looking forward over the next few years it is almost certain there will be more rationalisation among societies.
The only real question is which will go. So instead of trying to spot the next, savers with spare cash should simply try to open accounts with as many of the remaining societies as possible. This, however, is becoming more difficult, as societies try to deter speculators by raising minimum opening balances and closing qualifying accounts.
Who gets the shares?
2.5 million savers with the following accounts open on 31 December 1995:
Bonus 180; Bonus 90; Bonus Share; Capital Choice; CashPlus; Extra Interest Share; Fixed Rate Bond (1 and 2 Year); Gold; Gold Plus; Gross Interest; Hambros; High Income Term Share; High Yield Term Share; Instant Access (Card); Instant Access (Passbook); Investment Bond; Investment Plus; Keysaver; Leicestercard Gold; Leicestercard 3 Year Bond; Midas; MoneyMonthly Term Share; MoneyBuilder Plus; MoneyReady; Monthly Income Bond; Monthly Income Investment Bond (3 Year); Monthly Income Option Bond (3/5 Year); Ninety Day; Option Bond (3/5 Year); Premier; Premium Plus; Prime Plus; ReadyMoney Plus; Regular Savings; Save-As-You-Earn (SAYE); Seven/7 Day; Share; Sharesave; Special Edition; Special Return; Step-Up Bond; Step-Up Bond Issue 2; Stock Market Bond; Tempus; TESSA.
To qualify, savers must be the first-named accountholder and must have at least pounds 100 in total in any number of accounts at the qualifying date, 56 days before the voting date (probably late this year, but yet to be finalised).
500,000 mortgage borrowers (those who are savers as well will get two sets of shares) with at least pounds 100 of mortgage debt owing on 31 December 1995 and on the voting date.
The plan is that the entitlement of people who die before getting their shares will pass to their beneficiaries. Alliance & Leicester employees and pensioners will also qualify.
Who doesn't get the shares?
2 million holders of other accounts and financial products including: Giro Current; Keyway; Alliance; Flexiplan Plus; Flexiplan; Tessa Deposit; Prime 90 Deposit; Prime Deposit; Offshore accounts (90 Day, Instant Access, Island); Visa credit cards; unsecured personal loans.
Also excluded are the thousands of people who opened accounts or took out mortgages this year; people who open accounts from now; those under the age of 18 at the voting date who hold accounts directly; and second- named accountholders.