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mutualThe members’ magazine from Skipton matters Spring 2011 Meet the Weares and their family: In this new issue of mutualmatters, our friendly advisers help three generations plan their future nest egg

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Society AGM Make your voice heard VOTEX Contents Page 4-5...... Making a difference where you are. David The Society’s giving in 2010. 6-9...... Members in focus. Read how the Weares

and their family make their money work hard for them.

Cutter 10-11...... Talkback. We discuss the burning issues Group Chief Executive of the moment with a panel of members. “ 12-13...... Skipton stars. Meet some of our people who are working hard for you. ...your Society remains 14-15...... What’s new. Our latest product and strong despite the service developments. 16-17...... Meet the Board. “challenging environment 18-19...... Notice of AGM. 20-30...... Summary Financial Statement. 31...... Locate your nearest branch. 32...... Competition. Win a family games console.

Welcome to the 2011 edition of your Mutual Your Society remains strong despite services such as funeral planning Matters member magazine. This is a great the challenging environment. We and . With our own, whole opportunity for me to let you know how have been profitable throughout of market, advice subsidiary, Skipton your Society fared in 2010, and update you the credit crunch and have boosted (SFS), our in- about what we’re doing to put you first in our operating profits by 94% over branch and telephone advisers are terms of products, services and community the past year, as well as further keen to help you in any way they can. involvement. improving our capital strength. You And you’ll find full details of how to can read a more detailed summary get in touch with them throughout At Skipton we’re acutely aware that ongoing of our financial performance in the this magazine. economic challenges, such as rising inflation Summary Directors’ Report on pages and fiscal tightening, will be hitting many of 20-23. Over the next few pages you’ll also our members and their families hard. Our meet some of our members, and response to this has been to provide: I feel certain that the recent financial hopefully gain inspiration from what • Some of the most innovative and good crisis will result in a very different they’re doing to make their money value mortgage, savings and general culture in Britain, in terms of how work as hard as possible (pages 6-9), financial solutions available (see pages much individuals spend, borrow and as well as some helpful hints and 14&15); save. Skipton has championed the tips from our friendly advisers. I hope values of financial prudence for more you enjoy reading the rest of the • Enhanced service including the addition of than a century-and-a-half and we’re magazine. 16 new outlets (pages 14&15); passionate about helping you to reap • Continued support of the communities in the rewards of doing the same. which you live and work (pages 4&5); As well as offering good value • Involvement with our members in shaping mortgage and savings solutions, we David Cutter, Group Chief Executive the Society’s future (pages 10&11). do this by providing complementary

2 For more about our 2010 performance visit skipton.co.uk/performance 3 We feel enormous gratitude for the Making a difference Society’s support Your Society over the past five years, which has Our Communities where you are enabled the Skipton The Camerata Building Society is just one deserving organisation Camerata to delight which has benefited from our help audiences – young recently. Skipton is committed to and old – with classical music, modern helping community groups, charities, interpretations and eclectic performance events and causes up and down the UK venues. Despite the notes in classical music through financial and in-kind support. being set down for hundreds of years there is Here’s a flavour of just some of the still plenty of room for variety in the day-to-day things we’ve been involved with: life of a professional orchestra. To give you a snapshot of my world, here are some of my • Over 6,000 people joined in events at A year in the life of Skipton Building Society reflections on the Camerata’s bumper 2010. the Skipton Building Society-sponsored Camerata, just one of the Society’s Fashion Pavilion at the 2010 Great Ben Crick, Musical Director, Yorkshire Show; successful community projects, in the Skipton Building Society Camerata words of Musical Director Ben Crick • £400 donated to See, Dance & Cheer in Accrington, Lancashire, towards the One of the Camerata’s major strengths is our The summer festival season was incredibly With Skipton’s support we are able to work with purchase of pom-poms for children’s aim of performing works with orchestras as busy and saw us playing opera galas and schools and ensure that children, particularly those cheerleading classes; similar as possible to those originally other seasonal favourites. My personal with the added hurdle of rural isolation and lack of pictured by the composer. This saw us give highlight was the last night of the proms provision in their communities, can enjoy an active • Skipton’s Malton branch, North concerts in repertoire as diverse as Mozart concert at North Yorkshire’s annual involvement with the Arts. Yorkshire, took part in Cancer Research UK’s Race for Life, raising almost £800; and Schoenberg, from string quintets right Grassington Festival; you just cannot beat 2011 will see more workshops that encourage up to 55 piece orchestras. the incredible atmosphere this creates – people to write and perform music, as well as more • £500 donated to buy new buoyancy complete with a huge firework send off. A significant achievement of our last Camerata performances in unusual spaces such as aids for the Surbiton Sealion Seascout season was strengthening our links with If it’s not clear already, we’re not just about shopping centres, pubs and train stations. We want Group in Surrey; several choral societies. As a result, we’ve playing music. Last year we embarked on a more people to hear classical music in the places joined them for performances of some of the children’s project around the music of John they normally visit and, in doing so, to allow these • Skipton’s Lancaster branch stepped greatest choral works ever written. Cheetham, an eighteenth century Skipton great classical works to speak for themselves. in to replace £100 of charity donations We are also incredibly proud that 2010 resident and composer with considerable, stolen from the local convent. The brought the first performance of our youth unsung talent. Involving nursery children, money went to the Pakistan flood orchestra. It’s fantastic to see so many primary and secondary students, we relief appeal; talented youngsters shine. had over 100 pupils re-writing sections of • 15 years of support and over £1.7million Mozart’s Magic Flute before What’s in store for the Camerata in 2011: raised with members’ help for the joining their works with some of Mozart’s • A production of Purcell’s Dido and Aeneas with the NSPCC, through our affinity ISA original pieces and performing an abridged youth Camerata and a cast all aged under 18; account; version of an opera about Cheetham. • Further collaborations with NYMAZ (North Yorkshire • £100 donated to enable a local bowls In fact, we’ve been particularly active in the Music Action Zone) bringing classical music to tournament to take place at Silsden field of musical education, delivering over over 25 schools; Playing Fields Bowling Club, in West 50 workshops to children ranging from three • A series of chamber music recitals in pubs Yorkshire; right up to 17-year-olds looking to continue around Craven; their learning at university. Projects have • Collaborations with many local choral societies • 69 good causes across the country included sessions on performing, listening, on works such as Haydn’s The Creation, Mozart’s helped to the tune of more than composing and stagecraft and have Requiem and Handel’s Messiah. £100,000 during 2010 by our culminated with over 500 youngsters joining For dates of forthcoming events visit skiptoncamerata.co.uk independent Skipton Building Society Children discovering the power of music at a recent the Camerata for performances of Charitable Foundation. workshop at Christ Church C.E. Primary School in Skipton symphonies, songs and operas.

4 Do you have a good cause you’d like us to support? visit your local branch for more information and an application form 5 Members in focus

Zoe (far left) relaxing with (left to right) son Charlie, husband Ally, mum Marlene, dad Bryan and Members in focus daughter Hollie

Members in focus

Each year, Mutual Matters talks “I’m always looking to the future and outgoings and the skiing holiday they to pay for outright if we needed to. We’ve to real Skipton members about planning ahead for retirement and look forward to each year. always lived within our means, and are the lifestyle we want to have,” said the very protective of the things we have. “We work out what we need to manage their approach to managing their 36-year-old, who manages the drug and day-to-day and then put anything that’s finances, in a bid to inspire others. alcohol rehabilitation centre owned by “We try to balance this with making sure left into our ISAs so that we don’t touch mum and dad Marlene and Bryan (read we have a fulfilling family life, including This time, Zoe Weare and her it,” Zoe continued. family share what works for more about them overleaf). an annual holiday if possible.” them – and get some hints and “Our immediate priority is saving up “We like the security of having The couple regularly review their tips from our friendly advisers. for the children’s futures, whether they our household outgoings finances with the help of friendly staff decide to go to university, go travelling or from their local branch, to make sure Northern grit and discipline are evident something else. Once they’re catered for, covered, as well as knowing their pennies are working as hard as by the bucketload in conversations Ally and I can come into our own.” our longer term savings are possible towards their family goals. about financial matters with Zoe Weare and her close relations. To help towards this goal, Zoe explained there in case we need them.” Zoe and Ally are instilling the savings that she and Ally, who is a director of his Their driving forces are family and, The couple are fortunate to be habit into children Charlie (eight) and parents’ Lancashire farm, have a in particular, securing the futures of mortgage-free. Having sold the house Hollie (five) from an early age too. Hollie balanced portfolio of short and long- children Charlie and Hollie. they owned two years ago, they now live has a Child Trust Fund with Skipton and term, instant access and tax free savings. in a house on Ally’s family farm and have Charlie has a Leap children’s account with Zoe is at pains to point out that, for her, These include a 60-day Notice ISA each invested in a buy-to-let property which the Society. The Weares opened these thriftiness is a skill learned from husband and some stock market-linked savings they rent out. accounts for their children and now, Ally (39), who she says ‘instills the with potential for greater long term financial discipline in their relationship’. whenever they receive cash gifts for growth. The couple also have a joint Zoe explained: “Even before the credit birthdays and Christmas, encourage But it’s clear she’s become a star pupil Branch Access instant access account crunch, we never mortgaged ourselves them to spend half and save half in since they’ve been together, with clear with Skipton, which they use to put away to the max and have never bought these accounts. aspirations for the future. regular sums to cover household anything on credit that we couldn’t afford 6 For more information about Skipton products visit skipton.co.uk 7 Helpful hints for ‘Booking Bryan and an annual Marlene financial as they review Mark Butterworth, can pay Louise Allott, approach Technical Services Manager Barnoldswick Branch retirement dividends’ Skipton has its own, whole-of-market financial “It’s great to see Zoe and Ally have a advice subsidiary, called Skipton Financial positive, disciplined approach to their Services (SFS). With advisers in every Skipton finances, and are instilling a savings ethos branch, they can help people like Bryan and into their children,” said Louise. Marlene to review their circumstances and recommend options. SFS’s Mark Butterworth “They have a good balance of rewarding suggested some steps they might consider. easy access accounts which enable them to put away regularly for things they want, and “It’s good to see that years of hard work longer term cash and stock market-linked building up their business have provided the savings which are harder to dip into. couple with a good foundation,” he said. “However, there are other things they might want “To help safeguard the provisions they’re to consider to make the most of their finances. making for their family’s future, I’d The first important step is to ensure sufficient recommend they consider a protection protection against unforeseen events such as Speaking to Zoe’s mum and dad, invest any spare cash we’ve had in building review, so that we can help them ensure they long-term sickness or critical illness. Although Marlene (59) and Bryan (66) Holgate, it up our businesses and we’re fortunate in have the right insurance policies in place. Marlene and Bryan are approaching retirement, soon becomes clear that the habits of that we now have the centre and a couple of this remains key, particularly given their reliance thrift and hard work run in the family. other rental properties which provide us with “Skipton can recommend cost effective on the business for their income. Seven years ago the couple turned their additional income. In recent years we’ve tried policies which would protect their income “It’s then vital to plan for their retirement. respective professions – nursing and to avoid getting into debt and we plough if either of them was unable to work due to Although they are looking to the business to construction – to good use, opening everything we have into working capital for ill health or critical illness – or if the worst support them, pensions can offer valuable tax their own drug and alcohol rehabilitation the centre.” happened. advantages and they could benefit from taking From what Bryan describes as ‘ordinary walks centre near Gisburn in Lancashire. “As we’ve seen in recent times, a lot can further advice on this. of life’, it’s clear he and Marlene have built a Supported by Zoe and her brother change in a year and therefore it’s a good family legacy to be truly proud of and they “Next on the list is saving for short and Jason (39), they help people with idea for any family to review their entire are hoping the business will provide for both longer-term needs. The couple have an easy dependencies from all backgrounds finances annually, to make sure they have their retirement, and their family’s future, for access savings account with Skipton which to get their lives back on track over an the right insurance cover, and their mix of many years to come. they can dip into. They also have a couple of average stay of 12 months. savings and investments is continuing to rental properties as longer term investments. The couple currently have a joint Asked about what pensions or other work as hard as possible for them, towards Although this gives an element of diversification Sovereign Shares instant access account investments the couple have set aside for their short and long term goals.” to their portfolio, it would be worthwhile with the Society, as well as investing their retirement, Bryan is hoping their current considering alternative investments for heavily in their business as a nest egg for business will provide – if and when the time greater overall balance. the whole family, but are keen to know if comes when he’s ready to wind down that is! “They could also benefit from expert there are any other steps they could be “We’ve always been an energetic couple who’ve 3 Inheritance Tax (IHT) guidance. Given that considering as they near retirement. enjoyed good health and we’re fortunate that Annual Financial Review 40% of everything over £650,000 for a “I’ve had my own business since I was 29, – while our jobs are demanding and we often married couple could be given back to the first as a building contractor and, for the work long hours and weekends – we really Insurance and Protection 3 Government in tax, there are a number past seven years, running our own enjoy what we do,” he added. “We haven’t really of IHT planning opportunities available rehabilitation unit,” explained Bryan. thought about retiring yet but are hopeful that, 3 to try and mitigate this.” when we do, the business will continue to Later life planning “Over the years, Marlene and I have had to give us an income as a pension.”

8 To arrange a financial review visit your local branch or call our expert advisers on 0845 606 0867 9 online account range. Through innovative Mr Irvine asked if the Society would consider products like this, and our commitment to putting cash machines in branches, good value, the Society is working hard or if this would be too costly. Russell said: to reward members for saving, despite “The set up costs would be quite high but historically low interest rates and ongoing actually the biggest question mark we have economic challenges.. is whether there is sufficient The group asked whether rates are likely to demand for cash machines. Our rise in 2011. understanding at the moment is that our “We think they will rise this year – but it members prefer to call in to a branch and would take a brave person to try and predict make withdrawals face-to-face.” when,” said Rachel. “I’m interested in marketing,” Mr Irvine Pictured (left to right) “I suppose your view of this depends said, turning to Rachel. “How do you think are: Nicholas Irvine; whether you’re a borrower or a saver. We’re the sale of additional financial products to Rachel Ramsden, Head acutely aware that the majority of our customers coming into your branches of Marketing; Russell members are savers and low interest rates – should be handled?” Thompson, Area Manager; while helping borrowers – are really Rachel said: “We need to strike the right Philip Sollitt and Tracy hurting them.” balance. We’re a building society focused Fletcher, Head of Corporate Mrs Younger added that, to her, the face- on meeting our members’ financial needs, Communications to-face service of branches like but at the same time we’re a business which Scarborough is vital, as she feels daunted by must sell products via our branches to alternatives such as online banking. remain successful for our members. Rachel explained that it’s because we “We must make sure our products and services are so good you would rather members share their views & questions understand everyone has different preferences that we offer the choice of purchase them from us than anywhere else, Talkback: at a special round table event transacting in branch, online or over the and that we effectively communicate to you telephone. the benefits of what we have available.” Engaging with our members is vital in 1990. Meanwhile, Mr Irvine is a newer …Which moved the discussion on to the Russell added: to understanding and meeting your recruit – joining four years ago. topic of call centres. Rachel asked what everyone thought of them. “I don’t mind them It’s all about needs – both now and in the future. Russell kicked off the debate, asking if so long as they’re in the UK,” said Mr Irvine, they’d noticed any difference in service and everyone else agreed. building strong That’s why we recently invited a group since the merger. of members to a lively discussion Russell explained that we try to offer relationships with “Not at all”, the members chimed together. customers the best of both worlds – so that with senior representatives at our “ our members, “Everyone has been very friendly to us. If they can pop into or call their local branch if

Scarborough Branch. Here is a ever we have a question, we just pop in to they prefer, but have the option of calling our so that we fully snapshot of that evening, which we see a member of the branch team,” added Skipton Direct telephone service centre in the Sollitts. Skipton if they find that more convenient, or understand their “ hope all readers will find interesting Then Rachel asked: “How important are aren’t within easy reach of a branch. and informative. circumstances interest rates to you all, compared to We started with introductions. From service?” and can help them Skipton, Rachel described her vital role Mrs Sollitt answered: “We used to move our make the most of in spearheading communications with money around to get the best rates but don’t customers and other stakeholders. Russell really do that at the moment because they’re their finances. was representing our Scarborough Branch lower than usual everywhere. The main thing team and Tracy had organised the event, we save for is our annual holiday to New The group agreed Skipton strikes a good as editor of Mutual Matters. Zealand, to see our son and his family, who balance, but they would welcome additional live there.” communications, such as more member Of the members, Philip and Joyce Sollitt Margaret Younger Rachel explained that the Society will magazines and newsletters informing have been with Scarborough Building them of our latest product and service soon launch a new branch savings range Society – now Skipton following 2009’s developments. merger – for an impressive 43 years. designed to help people achieve such Margaret Younger is also a longstanding saving goals. Called My Savings, it will Joyce Sollitt The Skipton team took this, and the group’s customer, having opened her first account launch this Summer, echoing our similar other feedback and suggestions, away for further consideration. 10 Your feedback is very important to us look out for opportunities to have your say in the months ahead 11 Regional Manager Andy Braddick, who is give our customers the best experience responsible for York and other northern possible, whatever their age, Skipton branches, said: “I refer to York as circumstances or financial needs.” the ‘dream team’, not only due to the above points but because of their consistently high Loyal customers Gill and David Tyro performance, combined with first class congratulated the York branch team on their customer service under Sally’s inspirational ‘thoroughly deserved’ Branch of the Year leadership.” award, saying: Since our merger with Scarborough Building Society, we have had two branches We’ve...always operating in close proximity in York and – having assessed the suitability of this been impressed

arrangement – plan to consolidate them under one roof this year. Sally and her crew, by the friendly

who currently look after both outlets, will “ all work from one branch once suitable and personable premises are identified. service provided Sally said: “We’re really proud to have won “ the title of Branch of the Year. I hope that by the staff, who one of the things we stand out for is our teamwork and positive communication, greet you with a which has been particularly vital while we’ve Sally Kelly, Manager of our branch in Colliergate, York (centre), with colleagues (left to been working from two sites. warm smile and a right) Laura Smith, Nick Roe, Debbie Taylor, Chris Evans, Jacky O’Neill, Glen Dickson, “By being really together, and having a Gemma Sharp, Joanne Robinson, Sandra Winterburn and Rachel Redpath strong collective understanding, we aim to conversation.

Russell was selected unanimously because of his innovation and tireless commitment to making improvements which have benefited Skipton Stars the entire branch network and – ultimately – our members. For us at Skipton, it’s all about you, our members Specifically, Russell invented a framework for our customer facing teams, which helps them We want to make your experience of When it comes to looking after your to foster a deeper understanding of how our dealing with us the best it can be by financial needs our national network of various products and services can help listening to your feedback, understanding branches is key. Recognising the vital role people with differing circumstances. they play, we offer a Branch of the Year your needs, providing appropriate Russell receives his award from Group But it’s the way he brings this to life in his products and services and delivering award annually to encourage outstanding Chief Executive David Cutter and Chairman everyday dealings which makes Russell them to you with a friendly, personal performance. To have a chance of winning, Alastair Findlay special. He cultivates a passionate approach which is second to none. they must go that extra mile as a lynchpin commitment within his team to taking the time Russell Thompson, former manager of of their local communities – in terms of to really get to know their customers in order We couldn’t achieve any of this without their contribution to local life, commerce our Scarborough Branch, in Westborough, our dedicated employees – whether to best cater for their needs. Scarborough and, of course, customers seeking help and recently promoted to Area Manager, Branch Manager from 2006, Russell is one it’s those you deal with in our branches with financial matters. won our 2010 Famous Employee of the of the employees who transferred to Skipton and Skipton Direct service centre every Year award. Every quarter, members of In 2010, York was the branch which did all of following our merger with Scarborough and day, or our unsung heroes, working our 1,300-strong staff team are is admired by colleagues old and new for his hard behind the scenes to ensure this best. Manager Sally Kelly and her team won the accolade for their determination nominated by their colleagues to win boundless enthusiasm. we’ve got the right systems in place to Famous awards – for exceptional efforts “For me, it’s all about really taking the time make service excellence possible. to always do more than meet customers’ expectations; their commitment to getting it in keeping with our corporate values of to talk to our customers, make sure we help Here, we highlight the efforts of an right first time; to understanding and Enthusiasm, Fairness, Ownership and them, regularly review their financial individual and a team who we believe accommodating their customers’ needs; Trust. Our senior managers then select circumstances and ensure their arrangements personify Skipton’s service ethos. and for supporting their local community. one annual winner. are appropriate,” he said.

12 Want to see how our friendly staff could help you? Visit your local branch or call 0845 600 5673 13 Product Innovation Given the pressures associated with the UK’s faltering recovery we recognise that, more than ever, you need mortgages and savings that will help you make the most of your finances. That’s why we’ve continued to provide you Kris Brewster, Head of Products with straightforward, dependable good deposit levels and those restricted by the value and some product and service impact of falling house prices on the equity in innovations which enable you to transact with their homes. convenience, whatever your circumstances. We also had associated products catering for To this end, 2010 saw us launching a new lifelong needs, with a range of new offerings Telephone Saver account, for customers less including funeral planning and will writing. comfortable with using the internet but This year, we’re building on all of this with a preferring a remote rather than branch-based comprehensive new suite of ISAs to support service. Our groundbreaking My Savings members’ tax-free savings needs. Of course, goal-based online account range was also we will also continue to offer an attractive mix launched, which encourages and rewards of products through channels to suit all tastes What’s New people saving for specific aspirations – branch, telephone, internet and post. – from weddings to house deposits. Then We’re also constantly reviewing our services New branches, market leading there was also our continually refreshed range of regular savings accounts, fixed rate to ensure they are as hassle-free as possible. Examples of this are improvements we’ve mortgages and savings and a raft of bonds, FTSE-linked structured products, made to the maturity process for some of our other new products, it has been another children’s accounts and a Christmas Bond, all Paul Emmings and Sylvia Whittaker meet bonds, so that it’s easier for customers to of which received regular independent media busy year for Skipton, as we’ve striven to the team at our new Heswall branch re-invest into another attractive product once cater for our members’ evolving needs. endorsement, with 471 mentions in ‘Best Buy their existing term finishes. tables’ during the year. Head of Products, Kris Brewster, said: “Our One of our proudest achievements of 2010 financial advisers, visitors to the new Our mortgages proved popular too, and we aim is to have a comprehensive range of has to be the addition of 16 new outlets branches are also benefiting from were one of the few providers to offer a first options that offer customers long term good to our network, bringing the benefits of speaking to Skipton Financial Services time buyer product requiring a deposit of value, coupled with exciting limited Skipton’s personal, face-to-face service to (SFS) representatives, who can help them only five per cent last summer – as well as edition offers wherever possible, to both more members. review their financial goals and objectives a wide range of purchase and re-mortgage reward our loyal members and attract new and recommend solutions from across the In addition to the three new branches offers to support customers with varying customers to the Society.” acquired from our merger with entire marketplace. Building Society, between October and Chief Distribution Officer, Mark Fleet, December 2010 we opened branches said: “Striving to offer the best possible ment by an independent panel who judge in South Yorkshire, the Wirral, the Home experience to our customers is central to Putting YOU first us against a comprehensive framework of Counties and North Devon. Mainly acquired our mutual ethos and we understand that The Society’s strong track record for guidelines. from other financial services providers, they many of them value the convenience of looking after our members’ needs was As well as our customer service, they review share premises with the Society’s national having a local branch in their community.” officially recognised last Autumn, when we our work culture and look at factors such as estate agency network, Connells. were re-accredited with the prestigious whether our people feel they receive We’ve been celebrating our arrival in towns The new branches have enhanced our Customer First Award. In 2006, we were sufficient support with training and personal including Heswall by inviting new members national network by more than 10 per cent the first financial institution to be awarded development. to pop in and meet their friendly local and perfectly complement our existing Customer First accreditation and we are branch team over a few light refreshments ones by offering customers convenient now the only UK building society to have and a slice of celebratory cake, while access to a range of financial services retained it for a third consecutive time. close to home. learning more about the range of things we Customer First is a recognised standard have to offer. The Society now has 104 branches and for organisations achieving high levels of As we are the only national UK building three agencies nationally, from Aberdeen to service. To achieve and retain the award, the society with our own, whole of market Plymouth. Society has to undergo a rigorous assess-

14 For full details of how to contact your local branch see page 31 for a map of branch locations or visit skipton.co.uk/branches 15 Meet the Board David, a Chartered Accountant, joined the Society as A Chartered Accountant, Richard joined the Skipton Head of Audit in 1993, was appointed to the Board in Group in 1993. Having been Finance Director of HML and 2000 and became Group Chief Executive in January then Connells, he was appointed to the Board in 2002 2009. David was Chairman of the Society’s Operational and served as Group Finance Director until 2009, when Board from 2002 until 2005 and had Board responsibility he took on responsibility for managing our portfolio of for the Group’s subsidiary businesses until December subsidiaries as Group Commercial Director. Richard was re-appointed Group Finance Director in September 2010. 2008. He is Chair of the Society’s Executive and Group He chairs the Asset & Liability Committee and is a member Retail Credit Committees and a member of the Asset of the Society’s Executive and risk committees. Richard & Liability and Board Risk Committees. Externally, he is is a Trustee of the Society’s Charitable Foundation and a Governor of Malsis Preparatory School. a Governor of Ermysted’s Grammar School, Skipton, and Menston Primary School. David Cutter Group Chief Executive Richard Twigg Group Finance Director

Alastair, a Chartered Accountant, joined the Board as a Peter has been a Non-Executive Director since May Non-Executive Director in June 2006 and was appointed 2007 and is Chairman of the Board Risk Committee Chairman in April 2010 after two years as Vice Chairman. and a member of the Nominations and Remuneration He is also Chairman of the Nominations Committee and Committees. Prior to joining the Board he was Sales and served on the Audit Committee. After a number of years’ Marketing Director of Norwich Union, having previously experience in the corporate finance department of a City been a Director of General Accident and CGU. He was investment , Alastair was Group Finance Director of President of the Chartered Insurance Institute, the The Mersey Docks and Harbour Company from 1996 to professional body for the insurance industry in 2006 2005. Alastair is also Vice Chairman of the Countess of and his other current roles include Director of Unum Chester Hospital NHS Foundation Trust. Ltd. Peter is also a member of the advisory boards of Accenture Insurance and Simply Biz plc. Alastair Findlay Chairman Peter Hales Non-Executive Director

Sandy became a Non-Executive Director in July 2003 and Nimble joined Skipton in April 2009 and sits on the Board is Chairman of the Audit Committee and a member of Risk and Audit Committees, having been on the Board of the Nominations and Remuneration Committees.Richard During Scarborough Building Society for three years. He qualified her career as an accountant, Sandy was Twigg a partner of as a solicitor and became Senior Partner and then Deputy PricewaterhouseCoopers and was previously a Director Chairman of Eversheds before he retired in 1999. Nimble is at KPMG. In June 2005, she wasGroup appointed Commercial by the FSA Chairman of N G Bailey and a Non-Executive Director of a as a Non-Executive Director of the Financial Services number of other companies. In addition, he was Chairman Director. Age 45 of Leeds Metropolitan University for six years, Chairman of Compensation Scheme. In September 2010, she joined Irish Eureka! until 2007 and Regional Chairman of the Institute of Life & Permanent Group Holdings plc as a Non-Executive Directors in Yorkshire and the Humber until June 2009, and Director. is a Non-Executive Director nationally.

Alexandra (Sandy) Kinney Non-Executive Director Peter (Nimble) Thompson Non-Executive Director

Noel joined the Board as a Non-Executive Director William Worsley joined the Board in 2009 and serves on the in July 2004. He is a member of the Audit and Board Risk Committee. Formerly Chairman of Scarborough Nominations Committees, Chair of the Remuneration Building Society, he is a Fellow of the Royal Institution of Committee, and was appointed Vice Chairman in Chartered Surveyors and President of the Country Land April 2010. Before his retirement in 2004, he was a & Business Association (‘CLA’). He is also a Non-Executive partner in Hammonds, the international law firm, Director of The Brunner Investment Trust plc and a former where he specialised in corporate finance. member of the Private Banking Board of the merchant bank Guinness Mahon & Co. His early career was spent with property consultants Savills and Humberts. Noel Hutton Vice Chairman William Worsley Non-Executive Director

16 17 Voting instructions Voting notes As a voting member, you have the 1. You are entitled to vote if you are at least right to vote on matters affecting 18 years old on the date of the AGM and are the first named account holder in our your Society. Register your vote in records. You must also either: any of the following ways:  a) have had at least £100 in your savings account (including Permanent Interest Online Bearing Shares (PIBS)) on 31 December 2010 and continue to have a savings Members – excluding holders of Permanent account with the Society at all times Interest Bearing Shares (PIBS), or members between 31 December 2010 and the who are only Castle Money or Royal London voting date, or customers† – can vote online. Just log onto b) have owed the Society not less than skipton.co.uk/agm or use the link on our £100 on your mortgage(s) on 31 December homepage at skipton.co.uk, then follow 2010 and on the voting date. the instructions. You will need the two part 2.  No matter how many savings or mortgage security code printed on your voting form. accounts you have, in any capacity, you Online voting is available 24-hours a day until are only entitled to one vote on each 5pm on Friday 15 April 2011. resolution. If you vote online and subsequently change 3.  You may either vote in person at the AGM your mind, you can vote again using the same or you may use the voting form to appoint two part security code. If you vote by post as a representative to attend and vote for well as online, then the last vote received is you as you direct. You may appoint the the one that will be counted. Chairman of the Meeting or anyone else as your representative; they do not have to be a member of the Society. By Freepost 4.  Your representative may vote for you at the AGM on a written poll but not on a show of Please complete, sign and date the voting form, hands. then place it in the enclosed Freepost envelope and post it to arrive by 5pm on Friday 15 5. If you appoint a representative to vote on April 2011. your behalf and your representative does Notice of AGM not attend the AGM, your vote will not be counted. At a branch This year’s Annual General Meeting (AGM) of Skipton Building 6.  Members attending the AGM in person will be required to produce their passbook, Society will be held at the Skipton Building Society Principal Please complete, sign and date the share certificate or other evidence of voting form, then place it in the enclosed membership to gain entry to the AGM. Office, The Bailey, Skipton, North Yorkshire, BD23 1AP on Tuesday Freepost envelope and put it in the ballot Representatives will also need to produce 19 April 2011 at 6.30pm for the following purposes: box at any of our branches by 3pm on an appropriate form of identification to Wednesday 13 April 2011. gain entry to the meeting. Ordinary resolutions Notes that form part of this Notice of 7.   Please remember to sign the declaration 1. To receive the Report & Accounts AGM can be found adjacent. At the AGM on the voting form as only signed forms will be valid. 2. To re-appoint KPMG Audit Plc as By order of the Board Come to the AGM at 6.30pm on Tuesday 19 8.  A vote withheld is not a vote in law, which auditors April 2011 at our Principal Office, The Bailey, means that the vote will not be counted in 3. To approve the Report on Directors’ Skipton, North Yorkshire BD23 1AP. Please the calculation of votes for and against the Remuneration also bring your passbook, share certificate or resolution. other evidence of membership. (The venue is Elections of Directors 9.  Online voting excludes holders of wheelchair accessible and hearing loops will Permanent Interest Bearing Shares (PIBS), 4.1 To re-elect Peter Robert Hales John Gibson be available on request.) If you need a sign or members who are only Castle Money or 4.2 To re-elect Charles Noel Hutton Chief Risk Officer and Secretary language interpreter, please let us know by Royal London customers. Tuesday 5 April 2011. 4.3 To re-elect Richard John Twigg 4 March 2011 † See note 9 in Voting notes. 18 You can register to vote online 7visit skipton.co.uk/AGM 19 Financial Highlights 2010 • Group profit before tax from continuing operations increased by 94% to £35m, compared to £18m in 2009 (i.e. excluding the one-off gain of £40m from the sale of Callcredit Information Group in December 2009 and the profits it generated that year); • The £17m increase in Group profits from continuing operations was largely due to the improvement in the Mortgages and Savings division, where losses reduced by £26m from £33m to £7m. The Group profits were also bolstered by another good performance from the Estate Agency division which delivered profits of £48m (2009: £54m); • Our Core Tier One capital ratio, Summary Financial Statement a measure of financial strength, was 11.1% at 31 December 2010. This financial statement is a summary of subdued housing market conditions We also restructured in the spring, to maximise The increase from 9.4% at 31 information from the audited Annual Report during the second half of 2010, the Society efficiency, re-focusing on core activities and December 2009 was partly due & Accounts, which will be available to continued to enhance its financial strength reaffirming our members’ status at the heart to our strategy of deliberately members and depositors online at thanks to our clear strategy to grow the of everything we do. This resulted in – among reducing the size of our balance skipton.co.uk/performance or free of charge business while maintaining appropriate other things – the sale of our subsidiary sheet. Group mortgage assets on demand at every office of Skipton levels of capital and liquidity. mortgage distribution business Pink Home declined by £1,025m during the Building Society from 21 March 2011. for a profit of £1.2m. Overview year (9.6%); It is widely recognised that mutuals like Summary Directors’ Report We introduced a number of measures • The net interest margin reported Skipton face a rare opportunity to meet It is pleasing to report that Skipton to mitigate the impact of exceptional for the full year of 0.37% remained consumers’ post-credit crunch desire Building Society continued to succeed in circumstances on the Society, including similar to the prior year (2009: for alternatives in financial services. 2010, substantially increasing the Group’s Bank Base Rate remaining at 0.5% 0.36%), but was more than double Consequently, we are commencing a trading profits and improving its Core Tier for almost two years. These included at 0.40% for the second half of business transformation programme, One capital ratio to 11.1% whilst remaining exercising our right to remove the ceiling on 2010 when compared to the same focusing on everything from systems to dedicated to serving its members and the our mortgage Standard Variable Rate (SVR), period in 2009; products and services. This will underline communities in which they live and work. increasing it from 3.50% to 4.95%. At 4.95% our mutual commitment to offering • Impairment losses on loans and Despite a continuation of historically low our SVR still remains below the average of advances reduced by £29m, from the top 10 UK building societies. the best possible experience to our interest rates, funding constraints and customers for years to come. £44m in 2009 to £15m in 2010.

20 For more about our 2010 performance visit skipton.co.uk/performance 21 Service Our financial services outsourcing Summary Directors’ Report During the year, the Society made a provider, HML, saw its profitability significant investment in new branches, temporarily impacted by a moribund mortgage market. Its operating profits Savings focused on maintaining this cautious opening 13 new outlets in South Yorkshire, (excluding integration costs) reduced growth throughout 2011. the Wirral, the Home Counties and North We have continued to strengthen our from £4.7m in 2009 to £2.6m. However, retail savings offering with innovative Devon. Sharing premises with our estate Our mortgage portfolios continue to following extensive restructuring and new products and services for varying agency business, Connells, they will boost perform well, compared with our peers. investment over the past couple of years, circumstances, such as our Telephone accessibility and convenience for new and We significantly reduced our impairment HML is in a good position to benefit Saver account and the My Savings existing members in these communities, losses during the year, by effectively from an expected improvement in the online range helping members to as well as being a cost effective way of managing our North Yorkshire Mortgages market for outsourcing financial services achieve their savings goals. As a result, and Amber Homeloans portfolios, while enhancing our distribution capability. products, as well as exploiting new 82% of our funding is now derived from always seeking to treat customers fairly Community business opportunities. customers, up from 79% the year before. and as individuals. While Society arrears We believe in investing in the areas where At the same time, we have maintained a rose slightly, this was a modest increase Outlook delicate balance between offering our from a very low base and they remained our members live and work both through Once again, the outlook remains mixed members straightforward, transparent in line with industry averages. the Society and our independent Skipton and dependable long-term good value, Building Society Charitable Foundation. To for the year ahead, with the impact of the complemented by regular special offers, this end, we continued to play an active Government’s fiscal tightening on economic and keeping retail funding costs at a ....mutuals like part both in our Northern heartland and in growth and unemployment as yet unclear. sensible level in the best interests of all Skipton face a branch regions across the country, with an This means we will continue to manage the our members. emphasis on organisations which reflect our business carefully and prudently. However, it Mortgages rare opportunity to charitable priorities such as the Arts, sport, is our belief that growth will be positive but

“ general community enhancement and modest in 2011, and the road ahead remains We continue to honour our principal meet consumers’ money advice. a lengthy and arduous one. The prospects purpose of helping people to achieve post-credit crunch of housing market recovery will remain their home ownership aspirations. Group limited until the strictures still impacting During 2010, after deliberately reducing desire for greater Skipton’s diversified Group structure on credit markets are removed, enabling lending while we concentrated on “ continues to be a lynchpin of our ongoing lending to pick up again. House prices strengthening the Society’s capital, we competition success. Our range of businesses has, have now fallen in excess of 20% since their cautiously increased it again by offering and alternative collectively, continued to weather the a competitive range of products for 2007 peak, and there is a real possibility of storm well, making a positive contribution differing needs. Mortgage completions solutions in further, albeit limited, falls. to the Society during 2010. Our Estate amounted to £481m, an increase of 18%. financial services. Given these further risks to recovery, it is These included lower deposit loans Agency division, headed by estate our view that the Base Rate will remain low agency network, Connells, achieved for people affected by the impact of Chesham Merger for some considerable time. As well as the housing market volatility on the equity impressive profits of £48m. The reduction continued constraints this will place on our We completed our second merger in two in their homes and one of the only First of 11% compared to 2009 was due to profitability, we are acutely aware of the years, with Chesham Building Society, Time Buyer mortgages available at that decreasing transaction levels in the impact on our saving members and will do ensuring an uninterrupted service for former time, requiring a deposit of just 5%. The second half of 2010 as a result of a everything possible to help cushion them in often market leading competitiveness Chesham customers from completion. This subdued housing market. the year ahead and beyond. of our mortgage and savings products union further enhanced Skipton’s retail Of our other major subsidiaries, Skipton Therefore, we remain vigilant; committed was recognised with 471 mentions in capacity, creating an enlarged mutual Financial Services (SFS) continued to to helping our members navigate a course independent newspaper ‘Best Buy’ tables with three extra branches. The majority thrive, thanks partly to the popularity through unprecedented obstacles; and during the course of the year. In order to, of Chesham staff were re-employed by of the market leading solution it offers cautiously optimistic that we are well placed again, balance our customer focus with Skipton, though its former Head Office was to help customers keep track of their the need to control risk to the business, to take advantage of the appropriate closed as the most cost effective solution for investments, called MII (Monitored these products were offered in limited strategic opportunities that will present the combined business. Informed Investing). edition tranches. Our efforts are now themselves.

22 For more about our 2010 performance visit skipton.co.uk/performance 23 Group results for the year ended 31 December 2010 2009 Group statement of movement in reserves 2010 2009 £m £m £m £m Continuing operations Reserves at 1 January 762.9 703.6 Net interest receivable 54.9 53.3 Net expense for the year not recognised in the Income Statement 23.5 1.9 Other income and charges 385.3 382.8 Transfer of engagements 6.1 - Profit on disposal of subsidiaries 1.2 - Profit for the year 25.5 57.4 Fair value gains 2.0 3.9 Reserves at 31 December 818.0 762.9 Administrative expenses (396.6) (379.7) Negative goodwill on merger 3.1 - Impairment losses (14.9) (42.3) Summary of key financial ratios 2010 2009 % % Profit for the year before taxation 35.0 18.0 Taxation (9.8) (4.3) Gross capital as a percentage of shares and borrowings 9.20 7.58 Profit for the financial year from continuing operations 25.2 13.7 Liquid assets as a percentage of shares and borrowings 27.75 28.95 Group profit after tax for the year as a percentage of mean total assets 0.17 0.39 Discontinued operation Group management expenses as a percentage of mean total assets 2.70 2.63 Profit from discontinued operation - 43.9 Profit for the financial year 25.2 57.6 Non-controlling interests 0.3 (0.2) Gross capital represents the general The profit ratio measures the proportion Profit for the financial year attributable to members 25.5 57.4 reserve, cash flow reserve and available-for- that the Group’s profit after tax for the year sale reserve together with minority interests, bears to the average of the Group’s total Group financial position at 31 December 2010 2009 subordinated liabilities and subscribed assets during the year. Mean total assets £m £m capital, as shown in the Group Statement are calculated as the average of the 2010 Assets of Financial Position. The gross capital ratio and 2009 total assets as shown in the Liquid assets 3,379.7 4,058.9 measures the proportion which the Group’s Group Statement of Financial Position. A Mortgages 9,733.4 10,739.0 capital bears to the Group’s liabilities to reasonable level of profit is required each Other loans 81.3 74.3 holders of shares, depositors and other year to maintain the gross capital ratio at a Derivative financial instruments 140.6 265.5 providers of funds, that is, its investors. suitable level to protect investors’ funds. Fixed and other assets 404.5 431.1 Liquid assets represent the total of cash in The management expenses ratio measures Total assets 13,739.5 15,568.8 hand and balances with the Bank of England, the proportion that the administrative loans and advances to credit institutions and expenses of continuing operations bears to Liabilities debt securities. Liquid assets are generally the average of the mean total assets during Shares 9,388.5 10,470.2 readily realisable, enabling the Group to the year. Borrowings 2,788.6 3,551.7 meet its general liabilities during the year. Derivative financial instruments 260.8 263.7 Other liabilities 181.6 220.2 Subordinated liabilities 214.2 213.0 This Summary Financial Statement was approved by the Board of Directors on 22 February Subscribed capital 84.7 83.6 2011 and was signed on its behalf by: Non-controlling interests 3.1 3.5 A I Findlay Chairman Reserves 818.0 762.9 D J Cutter Group Chief Executive Total liabilities 13,739.5 15,568.8 R J Twigg Group Finance Director

24 25 Independent auditor’s We also read the other information Summary Directors’ decisions relating to their own remuneration. statement to the members contained in Mutual Matters and consider Remuneration Report The Remuneration Committee met eight the implications for our report if we become times during 2010. In discharging its duties, and depositors of Skipton aware of any apparent misstatements or This report aims to provide information the Committee reviews and takes into Building Society material inconsistencies with the Summary about the Group’s policies on remunerating account independently produced data Financial Statement. Directors and discloses the remuneration in relation to similar financial services Pursuant to Section 76 of the Building of the Directors. The Board is committed to Basis of opinion organisations. Independent remuneration Societies Act 1986, we have examined the best practice in its remuneration policy for consultants advising the Committee have Summary Financial Statement of Skipton We conducted our work in accordance with directors and this report explains how the no other connection with the Group. Building Society for the year ended 31 Bulletin 2008/3 ‘The auditor’s statement Group applies the principles in the Corporate December 2010 set out on pages 20-25. on the summary financial statement in the Governance Code relating to remuneration, The Committee comprises three Non- United Kingdom’ issued by the Auditing insofar as they are considered appropriate Executive Directors, Messrs Hutton This auditor’s statement is made solely Practices Board. Our report on the Group’s to building societies. (Chairman) and Hales and Ms Kinney. The to the Society’s members, as a body, and Chairman, Group Chief Executive, Chief Risk full Annual Accounts describes the basis Remuneration Committee to the Society’s depositors, as a body, in of our opinions on those Annual Accounts, Officer and Secretary, Human Resource accordance with Section 76 of the Building the Annual Business Statement and the The Remuneration Committee is responsible representatives and external advisers may Societies Act 1986. Our work has been Directors’ Report. for determining, on behalf of the Board, the be invited to attend meetings as and when undertaken so that we might state to the Group’s remuneration policy and reviewing appropriate. Society’s members and depositors those Opinion its adequacy and effectiveness. The The Non-Executive Directors’ Remuneration matters we are required to state to them In our opinion the Summary Financial Committee is also responsible for setting, Committee, which comprises Messrs Findlay in such a statement and for no other Statement is consistent with the full Annual reviewing and approving remuneration for (Chairman), Cutter and Twigg, determines purpose. To the fullest extent permitted Accounts, the Annual Business Statement the Chairman, the Executive Directors and the level of the other Non-Executive by law, we do not accept or assume and Directors’ Report of Skipton Building certain other key individuals. The Committee Directors’ fees. responsibility to anyone other than the Society for the year ended 31 December also receives recommendations from the Society and the Society’s members as a 2010 and conforms with the applicable Group Chief Executive for approval of the Directors’ remuneration policy body and the Society’s depositors as a requirements of Section 76 of the Building remuneration for Senior Executives. Executive Directors’ remuneration body, for our work, for this statement, or for Societies Act 1986 and regulations made The Committee operates under the the opinions we have formed. The Board’s policy is designed to ensure that under it. remuneration principles (see below) which it Executive Directors’ remuneration reflects has adopted and that take into account the Respective responsibilities of performance and enables the Group to FSA’s Remuneration Code. During 2010 the directors and auditor attract, retain and motivate a sufficient Committee reviewed its policies relating to The Directors are responsible for preparing number of high calibre individuals to lead J L Ellacott bonus pay and adopted a set of incentive the Summary Financial Statement within and direct the organisation and deliver principles over the design and award of both Mutual Matters, in accordance with for and on behalf of KPMG Audit Plc, continually improving business performance. Statutory Auditor annual and longer-term bonus pay. applicable United Kingdom law. Our In establishing, implementing and Chartered Accountants During 2010, the Committee received an responsibility is to report to you our opinion maintaining the remuneration policy the Leeds annual report from the Chief Risk Officer on the consistency of the Summary Committee applies the Group’s remuneration Financial Statement with the full Annual 22 February 2011 and Secretary on the implications of the remuneration practices within the Group for principles. The principles are relevant to Accounts, Annual Business Statement and the Society and each of its divisions and Directors’ Report and its conformity with the risk and risk management, and compliance with the Committee’s remuneration references to ‘Group’ include the Society. relevant requirements of Section 76 of the The remuneration principles are: Building Societies Act 1986 and regulations principles and incentive principles. made under it. The Committee reports to the Board and all • Remuneration at Skipton encourages recommendations are considered by the the highest levels of stewardship and Board, but no Director participates in any corporate governance;

26 27 • Remuneration does not encourage against personal objectives, both of Non-Executive Directors’ remuneration The Chairman’s fees are reviewed and inappropriate taking of risk; which are linked to the achievement of Non-Executive Directors’ fees (excluding approved by the Remuneration Committee. the Group’s strategic objectives, which the Chairman) are reviewed annually by the • Remuneration is sufficient to secure and include effective risk management. Non-Executive Remuneration Committee Service contracts retain the services of talented individuals with recommendations made to the Board. The Executive Directors are employed from other companies or mutuals, • Pensions – the Executive Directors The reviews are based on the responsibilities on rolling service contracts which can be receive contributions of 20% of basic recognising the diverse nature of the and time commitments required for Board terminated by either the Society or the Group and the nature of its stakeholders; salary payable into defined contribution and Board sub-committee meetings and Director giving one year’s notice. Unless pension arrangements. also reflect comparable data from similar • Remuneration recognises the notice to terminate is given by either party, financial services organisations. Additional appropriate level of Group/divisional and • Other benefits include provision of a car the contracts continue automatically to the fees are paid to those Non-Executives age of 65. individual performance which will create or car allowance and private medical Directors who undertake additional duties a strong and sustainable Society for the insurance. and responsibilities, including chairmanship Non-Executive Directors do not have service benefit of borrowers and savers, now and of Board committees. contracts. in the future; 2010 Executive Directors’ Remuneration review: Non-Executive Directors only receive fees, Directors’ emoluments • Remuneration for some senior do not participate in any performance pay KPMG Audit Plc has audited the information management has an element tied to The Executive Directors’ pay and scheme, nor do they receive pension or other set out in the next three tables. the longer-term performance of their performance related awards are subject benefits. The Non-Executive Director basic division to reflect the time horizons of the to review against the Group’s overall fee for 2010 remains unchanged since 2007. decisions made by divisional leaders; performance in respect of profitability and, in the light of the Society’s financial Non-Executive Directors 2010 2009 • Remuneration arrangements are Committee Committee performance in 2009, the Committee Fees Fees Total Fees Fees Total straightforward to communicate, decided that there would be no increase in £000 £000 £000 £000 £000 £000 understand and administer. basic pay for 2010. Mr A I Findlay (Chairman) (note 1) 63 - 63 48 4 52 The main components of Executive As part of the Society’s efforts to reduce Mr C N Hutton (Vice Chairman) (note 2) 45 4 49 40 3 43 Directors’ remuneration are as follows: operating costs, the defined benefit pension Mr P R Hales (note 3) 40 1 41 40 - 40 scheme was closed to future accrual on 31 Ms P M Hay-Plumb • Basic salary – which takes into account 40 8 48 40 3 43 December 2009 and from that date the (resigned 21 December 2010 ) (note 4) job content and responsibilities, Executive Directors receive pension benefits Mr W H Jack individual performance (assessed - - - 13 - 13 under the Society’s defined contribution (retired 28 April 2009) annually) and salary levels of similar arrangements. Ms A B E Kinney (note 5) 40 - 40 40 - 40 positions in comparable organisations. Mr J B Rawlings Based on the recent performance of the 23 - 23 70 - 70 • Annual Performance Pay – as a mutual (retired 27 April 2010) business and the individual performance of Mr J Spence building society the Society does not 30 - 30 23 - 23 the Executive Directors, the Remuneration (resigned 30 September 2010) issue shares on the Stock Exchange. Committee awarded each of the current Mr P J S Thompson 40 - 40 30 - 30 For this reason the annual performance Executive Directors bonuses for 2010 pay cannot be based upon Share Mr W R Worsley 40 - 40 30 - 30 amounting to 21.2% of their basic salary. Option Schemes or Share Incentives 361 13 374 374 10 384 Plans unlike executive directors of Notes quoted companies. Instead, the 1. Mr Findlay became Chairman on 28 April 2010. Prior to this date he was Vice Chairman and up until 31 July 2009 he Executive Directors participate in a non- chaired the Audit Committee. pensionable performance incentive 2. Mr Hutton became Vice Chairman on 28 April 2010, and is Chairman of the Remuneration Committee. 3. Mr Hales is the Chairman of the Board Risk Committee which was established in September 2010. scheme. This is calculated by reference 4. Ms Hay-Plumb was appointed Chairman of the Audit Committee on 1 August 2009 until her resignation as a director to business performance measured on 21 December 2010. together with individual performance 5. Ms Kinney was appointed Chairman of the Audit Committee on 21 December 2010.

28 29 Executive Directors 2010 Annual Increase Pension Performance Sub in accrued scheme Salary Pay Benefits(1) total pension contributions Total £000 £000 £000 £000 £000 £000 £000 Mr D J Cutter 320 68 11 399 - 64 463 Mr R J Twigg 250 53 12 315 - 50 365 Mr T F Wood (resigned 22 182 - 9 191 - 38 229 September 2010) 752 121 32 905 - 152 1,057 Mr Wood’s emoluments have been calculated to 22 September 2010, the date on which he ceased to be a Director of the Society. In line with amounts due under his service contract he has also been paid compensation for loss of office amounting to £262,068.

Executive Directors 2009 Annual Increase Pension Performance Sub in accrued scheme Salary Pay Benefits(1) total pension contributions Total £000 £000 £000 £000 £000 £000 £000 Mr D J Cutter 320 - 15 335 19 26 380 Mr R J Twigg 247 - 12 259 7 22 288 Branch Mr T F Wood (appointed 7 80 25 102 207 - 16 223 September 2009) Locator 647 25 129 801 26 64 891 Find out where your Notes nearest Skipton branch is 1. Benefits comprise the provision of a car, or car allowance and private medical insurance contributions. Mr Wood’s 2009 benefits include £97,770 in relation to relocation costs.

As outlined on pages 14&15, we now have 104 branches and 3 agencies across the UK, in the areas indicated above. To locate your nearest branch, log on to skipton.co.uk/branches

30 31 Are you a Real Face of Skipton? Here’s how you could be the next Real Face of Skipton... We’re constantly on the look out for customers to become the new faces of Skipton, to star in our promotional literature or news stories. If you think you have what it takes to become one of the Real Faces of Skipton, we’d like to hear from you. Why not send us your photo today and write a small paragraph about yourself (you could even include the whole family)?

WIN For your chance to become a Skipton star, simply attach your a Wii photograph and information about yourself to the completed games tear off slip below. And, if you send your entry by console Friday 15 April 2011 you will be entered into a prize draw to WIN a Wii games console and accessories.

Name Your Account Number

Address

Postcode Telephone No. Email

How long have you been a member of the Society?

To view full terms and conditions for the competition go to skipton.co.uk/wii or call 0845 600 5676 for a paper copy. You can return your completed entry form to your local branch or send to: Skipton Building Society, Marketing Department, FREEPOST, SKIPTON, North Yorkshire, BD23 1YA.

Principal Office, The Bailey, Skipton, North Yorkshire BD23 1DN Telephone: 08458 501700* skipton.co.uk

Skipton Building Society is a member of the Building Societies Association. Authorised and regulated by the Financial Services Authority (FSA) under registration number 153706 for accepting deposits, advising on and arranging mortgages and insurance. Skipton Financial Services Limited is a wholly owned subsidiary of Skipton Building Society. Registered Office: The Bailey, Harrogate Road, Skipton, North Yorkshire, BD23 1DN. Registered in England, Number 2061788. Authorised and regulated by the Financial Services Authority under registration number 100013. *To help maintain quality and service some telephone calls may be recorded. Stock Code: 165558_25/02/11