Double bonus for C&G savers: Vincent Duggleby pinpoints the winners in the revised distribution plan

SOME investors in Cheltenham & Gloucester could be in line for a big bonus on their savings under revised terms offered by the building society to persuade members to approve its proposed takeover by Lloyds Bank.

The society announced on Thursday that it expected to pay about 13 per cent on account balances rather than the 10 per cent previously promised, but any member who switched money from one account to another between 31 March and 20 April will be able to have it counted twice.

When the original terms were set out in April, the society was criticised by some members who had unwittingly withdrawn or switched money just after the cut- off point on 31 March. The case of Muriel Hawkins was highlighted by the Independent. She had pounds 45,000 in the society - pounds 30,000 in a Gold account and pounds 15,000 in a Best 90 - but on 18 April she withdrew pounds 10,000 from Gold to invest in the National Savings Pensioners Guaranteed Income Bond, and at the same time transferred pounds 15,000 into her Best 90. Under the old terms, she could have qualified for a bonus on pounds 45,000 but now her maximum qualifying balance goes up to pounds 60,000.

The key lies in the choice of dates. Ms Hawkins can choose 31 March as the date for the Gold account, when it contained pounds 30,000, and 20 April for her Best 90 account, when that also held pounds 30,000. That she has never had pounds 60,000 in the society at any one time is irrelevant, although she must remember to bring both balances up to their maximum level before completion day some time in 1995. This may mean borrowing the money briefly, but a 13 per cent bonus will make that worthwhile.

In theory it would be possible to have switched up to pounds 50,000 from one account to another within the society and so increase the prospective bonus to the maximum payable on pounds 100,000.

Another investor celebrating the change of policy is Elizabeth Morrison. She already had a Tessa with C&G, so she qualified as a member, but on 4 April she withdrew pounds 5,000 from Abbey National to open a C&G Instant Seven account.

Under the old arrangement this account would have been disregarded because it was not open on 31 March. Now it falls within the new cut-off date so Ms Morrison can look forward to a percentage bonus of about pounds 650 plus another pounds 500 on top because this is now being paid on each qualifying account and not just once to each voting member.

The society has also cleared up another anomaly for people who closed one account and switched all the money to another C&G account. Previously, they would have been deemed to be starting their membership afresh, and would have lost out under a High Court ruling in June that members of less than two years' standing were not entitled to cash payments. Now their membership will be deemed to be continuous.

Second-named account holders, who in many cases are the widows of members who have died recently or who may die between now and the time the deal is completed, will lose out, unless they have another account in their own name opened before 31 December 1992.