Why has the merger taken place?

Because Scarborough Building Society has suffered losses amid the continuing economic turmoil. A statement from the societies reads: “Scarborough Building Society has seen difficult trading conditions leading to a substantial impact on profit and a resultant weakening capital position. In addition, the board of Scarborough has considered the possible impacts of continuing house price falls and the impending recession in the UK, and has concluded that the effect would be an unacceptable reduction in its capital resources and that, to protect fully the interests of its members, it should approach Skipton Building Society as its preferred merger partner.”

I am a Scarborough Building Society saver, what does this mean for me?

Do not worry – your money is perfectly safe, and can be accessed as normal. Once the merger is complete, your account will be rebranded as a Skipton account, and will have a similar, or better, interest rate. Skipton savers remain unaffected by the merger.

I have a mortgage with Scarborough Building Society, what does this mean for me?

All mortgage customers will be transferred to Skipton. All Scarborough borrowers currently making payments at or linked to Scarborough's standard variable rate (SVR) - currently 7.24 per cent - will benefit from Skipton’s lower SVR – currently 6.45 per cent. This is excellent news for SVR borrowers, as it means your monthly repayments will be lower.

Scarborough borrowers on fixed-rate deals will carry on paying their fixed monthly sum until the deal expires, at which point they will be placed automatically onto Skipton’s SVR, unless they negotiate another deal.

Skipton mortgage borrowers will remain unaffected by the merger.

Will I still be able to use my Scarborough branch?

Yes - Skipton wants to keep all of the Scarborough branches open, but the branches will be called the Skipton Building Society instead. Skipton says that the Scarborough’s current head office, in Scarborough, will continue as “a key operational and administrative centre”.

I have more than £50,000 with both Skipton and Scarborough - will I still be protected under the Financial Services Compensation Scheme?

No. When the merger is completed, the societies will only have one banking licence. Savers in both societies should therefore consider moving their cash around if they have more than £50,000 invested between the two.

So when will the merger be completed?

The merger is expected to be complete by the first quarter of 2009. A vote by Skipton and Scarborough members will not be required, and there will be no distribution to members of either society.

I work for Skipton / Scarborough - will I lose my job?

The societies today said that no compulsory redundancies are planned as a result of the merger.