Windfall Benefits

[Dudley]

All investment accounts now seem to have a clause that any Windfall Benefits accrued during the investment period should be donated to charity. Can anyone tell me what Windfall Benefits are and what is the likeyhood of any being received please? In what circumstances would they be accrued etc and is it anything to be concerned about?

[dzug]

They happen when a mutual organisation (like a Building Society) turns itself into a commercial one (like a bank). The owners (ie account holders) got cash and ceased to be owners.

The 'bank' then goes and demonstrates it doesn't know how to be a bank and gets rescued by a larger organisation and its shareholders lose out

In the current market situation there are unlikely to be any - in future, who knows. The only people who would get them would be those who had accounts before the 'donate to charity' rule became virtually universal. And the charities.

It's nothing to be concerned about

[buildersmate]

Different Building Societies set different dates as to when the 'windfall clause' would be applied. The perceived necessity came about because many individual investors were opening a whole series of Building Society accounts with small sums in them (typically £100) such that they could ensure they would benefit if demutualisation occurred. Hence only those who were (and still are) members who opened an account prior to the 'windfall caluse' being set up will ever benefit personally in the event that the organisation demutualises.
Even if one of the few remaining truly mutual societies now decides to become a bank, the payouts to elegible members have become trivial or zero. This happened with the recent merger of CoOp Bank and the Britannia BS.

[Dudley]

Thank you both for the comprehensive replies