Capital One to move savings account holders to Skipton

Savings account holders with low rate credit card provider Capital One will be transferred to a different organisation following the company's decision to restructure its operations.

Capital One has decided to stop providing savings accounts in the UK and has made an arrangement with Skipton Building Society for its Castle Money trading body to take over all the accounts on July 27th.

According to the online bank, which sent letters to account holders last week, the transfer will not affect the normal operations of the accounts, which will continue being serviced in accordance with existing conditions.

"The terms and conditions of your account will not change as a result of the transfer," a statement from the company stated.

"Your account will continue to operate as normal and can be serviced in the same way," explained the statement, which added that account balances will not be affected.

The company confirmed that customers will "continue to enjoy the protection of the Financial Services Compensation Scheme subject to the financial limit of £50,000 of the aggregate value of savings".

However, this cover will only be extended to the value that people will have with Skipton rather than each individual savings account being held.

"Where you hold in aggregate a balance in excess of £50,000 you would have to wait until Skipton's general creditors had been paid before you received a share of any remaining money," added the statement.

Only UK-based residents aged 18 and above could open a Capital One account, which was only meant for personal use and could not be opened for businesses, clubs, charities, other organisations or trustees.

Neither of the two organisations has revealed how many savers will be affected by the transfer, which will see consumers moved to the fifth largest building society in the UK.

Last year Skipton Building Society came to the aid of Scarborough Building Society, which it took over, expanding its asset base to over £16 billion, backed by over 860,000 customers.

The new savings account holders from Capital One will benefit from normal voting rights in the Skipton, which is a mutually-owned society.

Meanwhile, consumers have been advised that now is the best time to start putting away money in savings accounts in order to ensure there is a financial cushion in the current economic climate.

Writing in Love Money, Serena Cowdy has said: "Each of us should ideally have savings to tide us over for at least six months, in case we lose our jobs or face other unexpected financial emergencies".

"If you haven't started squirreling yet, now is the time to start," she recommended, adding that even just a month's worth of savings could make a huge difference between falling into debt and riding out the economic downturn successfully.