Nationwide customers squirrel away bumper £10 billion in savings during lockdown

Households have topped up their savings accounts in record numbers during lockdown, adding more than £10 billion in deposits at the Nationwide Building Society.

Releasing its annual report, the high street mutual revealed deposits during the past year increased by a bumper £10.6bn, which compares with £5.7bn during the year before the pandemic struck.

The lender added that those who struggled financially during the pandemic were helped with 256,000 mortgage payment holidays and 105,000 payment breaks for loans and credit cards.

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The details come as the group, which rescued the Dunfermline Building Society during the financial crisis, revealed pre-tax profits in the year to April 4 nearly doubled from £466 million to £823m due to a rise in income and cost-cutting measures across the business.

Nationwide Building Society retains a sizeable branch network. Picture: Greg Macvean

Mortgages remained strong, with customers taking advantage of the stamp duty holiday, although stricter criteria at the bank saw overall mortgage lending down slightly from £30.9bn to £29.6bn.

During the year, the building society introduced 90 per cent loan-to-value mortgages and also brought in 95 per cent loan-to-value mortgages this month.

Cost-cutting helped with the profit boost, with bosses revealing administrative expenses fell by £94m to £2.2bn.

This was in part due to lower running costs during the pandemic and comes as the lender said in future its 13,000 staff can work more flexibly.

“Remote working has been popular with colleagues and made us more productive,” the society noted. “The flexibility also helps us better serve our members. We are therefore adopting a flexible working model into the future, where colleagues can choose where they work.”

Chief executive Joe Garner said: “This year has shown the financial strength of the building society mutual model. It has been a tough year, one that tested the resilience of people and businesses.

“Given the profound uncertainties we faced, we focused on the things that were most important in times of crisis: namely to keep our people and members safe and our society strong.

“We entered the crisis in a position of financial strength and, in the face of a highly uncertain environment, we took steps to protect our finances.

“We finished the year financially and operationally strong, and well-placed to support our members in future.”

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