Nationwide keeps its savings promise

Updated: 
Not a headline you'd expect to see is it? A financial institution which actually stuck to it's word?

But the building society has indeed kept it's promise to give savers more control of their money, rewarding customers with an extra £1.6m in interest.

After promising a year ago to reward customer loyalty and start to pay interest on applications for ISAs, the building society has revealed that it's customers have benefited from an extra £1.6 million in interest.

Nationwide also promised to reward existing savers with exclusive savings products and during the past year it has done this with six products: three-year Christmas Loyalty Bond and Christmas Loyalty Isa (launched in November 2010), three-year Loyalty Fixed Rate Isa (April 2011), 18-month Loyalty Fixed Rate Isa and Loyalty Fixed Rate Bond (July 2011), 90 Day Loyalty Smart Saver (October 2011).

The society said that during the past 12 months, more than 145,000 members have taken advantage of these exclusive accounts.

Andrew Hagger of Moneynet said: "The problem with such commitments is that often they are little more than marketing fluff, not measurable and pretty soon forgotten about.

"The stand out statistic is that £1.6m in additional interest has been paid. This highlights just how much savers are losing at the hands of many other Isa providers. While Halifax adopts a similar approach under its own Isa promise, it's time that all banks and building societies were forced to fall in line and make this practice the norm, not the exception."

The building society has also reported that it's pre-tax profits are up 17 percent from a year ago to £172m - a figure it puts down in part to a 48 percent increase in mortgage lending. The society did say however that "prospects for the remainder of 2011-12 and 2012-13 are very challenging." It does not expect the Bank of England to lift the base rate until 2013.

Nationwide has positioned itself as a "challenger" to the established banks, opening 185,000 new current accounts during the last six months. It estimated that its market share of people's main bank accounts is 6.4%. Meanwhile, a strong Isa season helped it regain its position as the "number two" savings provider in the UK market behind Lloyds Banking Group.

SPONSORED FINANCIAL CONTENT