UK Building Society

[Gareth]

Hi.

I have a savings account with Skipton Building Society in the UK that I've had for over 25 years. It's registered at my dad's house in the UK and not my address in Japan. It's a branch only account, meaning I can't do anything online with it. Last summer, when I was in the UK for a visit, I popped into the branch to see what I should do with the account. The staff member suggested opening an online account and then transferring everything across. To open a new account using my Japan address, she said I needed my MyNumber number, which I didn't have with me, so I didn't bother doing anything at that time.

Several months later, I tried again via email to the branch but was subsequently told I couldn't open a new online account as a non-UK tax resident after all. So I was stuck with a branch only account. I changed the address to my Japan address and was then told that because it's a non-UK address, I could no longer pay into the account and incredibly could no longer withdraw until I returned to the UK. When I challenged the non withdrawal part, I was told that I could probably withdraw after all. But there was certainly some confusion about what was and wasn't allowed with a building society account having a non-UK address.

Just wondering if others have had any issues with UK Building Societies? My initial idea was to whack a load of cash in there and leave it for 20 years or until I needed it. Is it worth the hassle of trying to find another Building Society with a good saving rate that will allow an overseas address or should I just close the account and be done with it?

One further note about closing it though. The branch staff member said that should the Skipton ever get taken over, the account holders would share the bounty and as I have had an account for 25 years, it could be a nice amount. But how likely is that? Did she just say that to stop me closing the account?

Cheers for any thoughts

[Beaglehound]

Different UK financial institutions seem to have different policies on this. For example, Nationwide encourages customers to change to their overseas address with no noticeable effect on service. Sainsbury’s, on the other hand, requires you to close your account if you become a non U.K. resident.

Regarding your specific Skipton account, is it an ISA? That’s the main reason I can think of why you wouldn’t be able to add funds as a non resident. You cannot open a new account as a non-resident with any U.K. financial institution as far as I am aware, even as an existing customer, but adding funds should be OK as long as it isn’t an ISA. Skipton, as you suggest, may not have clear rules on overseas accounts, or they may be changing often.

Be aware that it is rare for building societies to maintain a decent rate of interest on accounts over a long period, so leaving your cash in this account for a long period is likely to result in a paltry rate eventually, and you cannot just change to their best paying account as you could in the U.K. I have this very issue, and am looking into NS and I as an alternative. They allow overseas customers and have competitive rates (for the moment anyway). You can’t apply online as an overseas resident so have to phone them, which I haven’t done yet as it’s not urgent and the prospect of sitting on hold for ages during lockdown is not appealing. I will likely look into it over the summer. I remember another poster has done this, so if they are still around they may be able to chip in.

On the demutualisation scenario, I can’t remember the last time this happened with a building society. Which isn’t to say it can’t happen. Maybe leave £100 in rather than closing completely?

[Wales4rugbyWC23]

Different UK financial institutions seem to have different policies on this. For example, Nationwide encourages customers to change to their overseas address with no noticeable effect on service. Sainsbury’s, on the other hand, requires you to close your account if you become a non U.K. resident.

Regarding your specific Skipton account, is it an ISA? That’s the main reason I can think of why you wouldn’t be able to add funds as a non resident. You cannot open a new account as a non-resident with any U.K. financial institution as far as I am aware, even as an existing customer, but adding funds should be OK as long as it isn’t an ISA. Skipton, as you suggest, may not have clear rules on overseas accounts, or they may be changing often.

Be aware that it is rare for building societies to maintain a decent rate of interest on accounts over a long period, so leaving your cash in this account for a long period is likely to result in a paltry rate eventually, and you cannot just change to their best paying account as you could in the U.K. I have this very issue, and am looking into NS and I as an alternative. They allow overseas customers and have competitive rates (for the moment anyway). You can’t apply online as an overseas resident so have to phone them, which I haven’t done yet as it’s not urgent and the prospect of sitting on hold for ages during lockdown is not appealing. I will likely look into it over the summer. I remember another poster has done this, so if they are still around they may be able to chip in.

On the demutualisation scenario, I can’t remember the last time this happened with a building society. Which isn’t to say it can’t happen. Maybe leave £100 in rather than closing completely?

Given that most of those building societies that demutualised in the late 1990's went bankrupt during the Lemans crash; Northern Rock, Bradford and Bingley, Abbey National to name but a few and are now mostly under the Santander Bank brand. I think carpetbaggers who want to convert to a Bank are very much in a small minority. The current small building society I have a mortgage with now is a lot more flexible with non-conventional borrowers than your big High Street banks.

[Gareth]

Hi

Thanks for the replies.

@Beaglehound It's just a "normal" savings account I have, not an ISA. The reason the staff member initially suggested an online account was the ease of changing it to better rates when they became available. But now can't do that. Will have a look at NS&I. Look forward to hearing how you get on with them.

@Wales4rugbyWC19 So if it does happen, I should take the money and run?!

[KyushuWoozy]

Will have a look at NS&I.

https://www.nsandi.com/income-bonds

I have these. They're called 'bonds' but basically I look at it as a regular savings account because you can withdraw any time without notice or penalties. It's paying 1.15% which isn't bad these days. Most importantly, you don't need to be UK resident to hold them and they're safe as houses.

[RetireJapan]

Will have a look at NS&I.

https://www.nsandi.com/income-bonds

I have these. They're called 'bonds' but basically I look at it as a regular savings account because you can withdraw any time without notice or penalties. It's paying 1.15% which isn't bad these days. Most importantly, you don't need to be UK resident to hold them and they're safe as houses.

Interesting option. The fact that they pay out monthly though means that income would have to be declared here, something I prefer to avoid by having overseas investments that internally compound or reinvest.

Had a quick look through the NS&I lineup but didn't see anything that fit the bill unfortunately.

[Gareth]

I suppose no matter what product or whichever building society I go with in the UK, I would have to declare any interest gained as income here. Hadn't really thought about that. Sounds like a faff. Would that also re-put me into the UK tax system, meaning I would have to deal with two tax systems? Is it really worth it? Or am I overthinking it and it's actually pretty simple?

[RetireJapan]

Japan is not too bad, you just have to keep track of any income along with the exchange rate.

Not sure about the UK, but I believe things like real estate (letting income, etc.) are taxable, but interest isn't.

[Beaglehound]

The U.K. rules are a tad confusing. In theory you have to declare interest payments (as well as income from property) from U.K. accounts but if you are a British citizen you are entitled to a personal allowance (maybe about 12k these days?) which means that unless you are a millionaire, you won’t be liable for any tax given how low interest rates are at the moment. I say in theory as although the HMRC website says you have to fill in a form to claim the personal allowance each and every year, they basically took me out of self assessment after I moved here and said on the phone that I didn’t need to do anything about claiming a personal allowance for ongoing interest. So I haven’t.

[Beaglehound]

Just a follow up on this: NS&I have just slashed rates on all of their accounts so not looking so attractive. I am still considering opening an account with them as a back up. I have money in the U.K. with Nationwide, which is OK with my having a Japanese address, but who knows for how long? I don’t want to be in the position of having to transfer money out of sterling due to having nowhere to put it. Options for storing cash in the U.K. as a non-resident seem to be getting narrower all the time.