My Skipton AGM Mag 2013

skipton.co.uk
04 / What Skipton means to us
10 / Inheritance – the generation game
12 / Life after work
20 / Notice of Annual General Meeting
Back / WIN a portrait session with family or friends
IN THIS ISSUE
Special 160th anniversary AGM edition March 2013
SkiptonMy
MY BUILDING SOCIETY
Society AGM
29 April 2013
Make your
voice heard
VOTEX
Celebrate
with us!
Skipton Building Society is
160 years old this year.
The founding values of
‘by hard work and hope’
from our original coat
of arms have served
us well. Join us as we
celebrate this rich
heritage and look
forward to our next
century-and-a-half

This year we celebrate the rich heritage
which has made Skipton Building Society
what it is today.
Please read on to hear from Skipton
colleagues and members about what
the Society means to them (pages 45)
and discover our exciting new plans for
investing in your communities (pages 67).
We’ll also take a trip down memory lane –
charting the Society’s impressive journey
since its origins in 1853, via the visionaries
who made it all possible (pages 89).
On pages 1011, we turn our attention
from our own legacy to the subject of
personal inheritance, and the varying
perspectives between the generations.
Two of our members share their hopes
for the future, having given up work after
lengthy careers, on pages 1213.
You can read what we’ve been up to on
your behalf throughout the past year
(pages 1415). On pages 1617 we take
a visual meander through the decades
which have seen the Society develop from
humble beginnings into the much larger
entity we are today, while always reflecting
our original, mutual values. There’s also an
invitation to join our Customer Panel on
page 35, and a chance to win a keepsake
photo shoot and prints (back page).
You can familiarise yourself with our
Board on pages 1819. Your Notice of our
Annual General Meeting, on Monday, 29
April, is on pages 2021. On pages 2223,
you’ll find details of proposed changes
to the Society’s Rules. And there’s a
summary of the Society’s performance
during 2012 on pages 24–34.
I hope you enjoy reading this magazine,
and please do take the opportunity to
vote and have your say on what comes
next for Skipton.
David Cutter, Group Chief Executive
2 MY SKIPTON skipton.co.uk MY SKIPTON 3to speak to a member of our team call 0845 850 1733*
w elcome to this
special, 160th
anniversary edition
of your member
magazine.
Group Chief Executive David Cutter by the Gateway of Skipton Castle.
This hometown landmark, with the rousing Norman French motto
‘desormais’, meaning ‘henceforth’, above its entrance, inspired our logo
and symbolises our history, current strength and promising future.

David Jacqueline Collier
customers of our Skipton and Crosshills
branches, seen here holding their
wedding picture from 48 years ago
“We got married in Staffordshire, where
Jacqueline’s parents lived, but are from
Cowling in North Yorkshire and have lived
there all our lives.
“We’ve been saving with Skipton for many
years, and have recently used some of our
nest egg to buy a caravan in Pickering, which
we can use for holidays throughout the year.
“We appreciate how the Society has helped
us save up for the things we want over the
years, and both love popping into the Skipton
and Crosshills branches, where the staff
are really friendly and go out of their way
to help us.”
If you’d like us to consider sharing your experience in future Society
communications...
As we celebrate our 160th birthday, we discover the
special relationship colleagues and customers have
shared with the Society over the years…
What
Skipton
means
to us
Lynda and Andrew Whitton with children Evan (eight – holding his
Young Achievers Award), sister Maya (10) and brother Sam (five)
Lynda and Andrew Whitton
from our IT department
“We love working for Skipton because we’re
part of a fantastic, supportive team of people
all pulling in the same direction, to serve our
customers as well as we can.
“This team spirit helped us on a personal
level in 2010. Our colleagues mounted a
superhuman effort to help us raise £96,000, to
send our son Evan to the United States for a
life changing operation.
“Evan has cerebral palsy and without this
treatment, which wasn’t then available in the
UK (and still isn’t without funding), he would
never have taken his first steps. However,
he’s now achieved the amazing milestone
of walking totally independently around our
home, thanks to everyone’s hard work and
support.
“In November 2012, Evan was chosen as
‘Youngster of the Year’ at the Yorkshire Young
Achievers Awards.”
Kenneth Grady
customer of
our Cleveleys
Branch
“If I’m ever
passing the
branch, I pop
in to say hello.
Since my wife
Jean died in January 2012, the Skipton
team have been amazing. They really look
after me and make me smile all year round!
“My relationship with Cleveleys branch
started over 22 years ago, when it shared
a building with the café I owned, called Ten
to Ten. Working next door, I always enjoyed
lots of banter with the team.
“For me, that’s what makes Skipton special
– it’s more than just a financial services
provider, it’s full of genuine people who
treat their customers as individuals.”
Brian Stott
from our
Business
Projects
team, which
spearheads
continuous
improvements
“I have worked
for Skipton for 37 years,
in various roles.
“Long before that, though, my
mum Muriel (inset) opened my first savings
account with the Society for me. This taught
me the value of money and I’ve been a
member ever since. I’m now very proud to
work for an organisation which encourages
customers to save towards a more secure
financial future, just as my mum did for me.
“One of my first roles involved reviewing
old investment account application forms.
Amazingly, I stumbled across the one my
mum filled in for my first account, in 1958,
in the process!”
Angela and David Newsome
Angela and David
Newsome with
parents George
and Joan and
triplets Laura,
Emma and
Ryan, now 18, all
customers of
Cleckheaton
Branch
“Belonging to the Society is a family affair for
us. When our triplets were three or four years
old, we wanted to teach them about saving for
the future and visited our local Skipton branch
to deposit their piggy bank savings.
“However, when Ryan handed over his money
and received a stamped passbook in return,
he started crying, which set the other two
off! I think they thought that the naughty lady
behind the counter had taken their money
away from them!
“Thankfully, they got the hang of it in the end
and have carried on saving with the Society.
I’m grateful for the personal support Skipton
offers families like us with our finances.”
write to us at: My Story, Skipton Building Society, The Bailey, Skipton,
North Yorkshire, BD23 1DN

A s part of our ‘Big 160’ anniversary
celebrations, we’re excited
to announce the launch of a new
charitable giving programme,
which is set to reward community
champions across the country.
Building on the Society’s commitment to
community investment, this will offer 160
grassroots organisations contributions of
£500 to support their work. Each applicant
will also have access to free resources to
help them with things such as managing
their money and marketing their charity.
This will replace previous schemes such as
our Community Contribution Awards and
branch community donations as we re-focus
our support on those who receive very little, if
any, funding from elsewhere.
As a building society, we originated as a
kind of club aimed at enabling people
to own their own homes. We are keen
to remain true to that ethos today, by
empowering people who go the extra mile
to make life better for local communities.
We hope you’ll help us spread the word
and encourage your local groups to apply.
Community allotments, recreational areas
for young people and social groups for the
elderly are examples of the kind of schemes
which would be relevant.
All you have to do is write to us,
using no more than one side of A4,
and tell us:
• The name of the organisation you’d like
us to help;
• Your involvement with them;
• What they do;
• What funding (if any) they currently receive;
• Most importantly: in no more than 500
words, how the donation will make a
positive impact;
• Your and their contact details.
A few things to bear in mind before applying:
• Your request must be on behalf of an
established community club;
• It must have its own operating account for
our cheque to be paid into;
• We don’t support religious or political causes;
• You must be happy for us to promote our
donation via the media, social media and
Society communications.
Making a
difference
Supporting your communities
is something we strongly
believe in, and 2012 proved to
be another busy year.
The Society’s giving helped pave the
way for some outstanding successes
during the course of 2012, as members
of Molesey Boat Club netted two gold
medals (in the men’s coxless four) and
five bronze medals (men’s eight and
men’s pair) at the London 2012 Olympic
Games. We’ve sponsored Molesey since
2009 and this summer saw eight of the
club’s rowers compete for their country.
We also donated a total of £120,302 via
our Charitable Foundation, to 77 good
causes up and down the UK, including
the Eccleshill Adventure Playground
(top) in Bradford and Burmantofts Senior
Action in Leeds (second from top).
We gave out over 80 branch donations
and Community Contribution Awards
to clubs and charities based in local
communities. Funding of £150 for
Mowbray Community Special School in
Bedale, North Yorkshire (middle), bought
two micro pigs to live on the school farm
and help teach the children about farm
life and how to care for animals.
Other local giving during the year
included £4,000 for the Craven Citizens
Advice Bureau (fourth from top), which
includes debt help in its range of
services, and £250 for Silsden Bowling
Club (bottom), to purchase new bowls
to encourage more young people to join
the club.
Get your club or community
group involved in our ‘Big 160’
For more information about our appeal...
visit skipton.co.uk/big160
write to us at: The Big 160 Appeal, Skipton Building Society, The Bailey,
Skipton, North Yorkshire, BD23 1DN
Giving
something
back

A century-and-a-half ago, life in Britain
was extremely hard, with an average
life expectancy of just 40. Many workers lived
in tiny, poorly built terraces where squalor
led to a prevalence of diseases like cholera
and typhoid.
For these people, the concept of buying a
home of their own was unimaginable, making
the achievements of our founders, such as
Samuel Farey and George Kendall, all the
more remarkable.
Amidst all the flurry and fervour of the Industrial
Revolution, in the mid-1800s, these exceptional
people spotted an opportunity which has
changed our lives today beyond recognition.
This was a time of rapid change, in agriculture,
the textile industry, transport, economic policy
and social structures. The UK population was
growing faster than ever, as the death rate
fell and births increased. Diets, and therefore
health, also began to improve.
The first building societies had already started
to appear, with the aim of helping ordinary
people – whose aspirations were growing
with the country’s increasing economic wealth
– to own their own homes. The first of these
‘terminating’ organisations, called Richard
Kettley’s, emerged in 1775. These were based
on a group of members pooling money to build
homes, and ceased trading once everyone
had achieved that objective.
However, these early examples were soon
replaced by ‘permanent’ building societies.
These were different, in that they continued
indefinitely and also catered for people who
didn’t want to build a home but simply wanted a
safe place to deposit their savings, for a return.
Hence, our founders were inspired to form
Skipton Building Society – originally called
Skipton and District Permanent Benefit Building
Society – in 1853.
Martin Wills, Collections and Engagement
Officer for Craven Museum and Gallery in
Skipton, which houses many old documents
relating to the Society’s inaugural years, said:
“The determination and vision
people like Kendall and
Farey demonstrated shouldn’t
be underestimated, and it
changed the lives of people
living in Skipton at the time
for the better.
“Not only was the ability to own one’s own
home an opportunity to live in better physical
conditions, it also dramatically affected
people’s life aspirations in general.
“Whereas previously they had often lived
in houses provided by their employers, and
therefore found it difficult to move jobs,
suddenly they were able to exercise personal
choice. Houses also became an investment
and, as we know, still today rank among many
British people’s prized possessions.”
In fact, Farey, Kendall and the handful of
other self-made townsfolk who established
the Society, were typical of the benevolent
movement of wealthy industrialists who
significantly influenced Britain’s rapid
development around that time. Others included
Bradford textile manufacturer Titus Salt, who
created the Saltaire ‘model’ village complete
with workers’ houses, hospitals, almshouses
and churches. Martin added:
“Mutuals like Skipton represented
the socially conscious mentality
which existed back then, and
the impact on people’s living
conditions and expectations for
their own futures was huge.
“Men like Farey and Kendall had made their
fortunesthroughtherapidlyexpandingindustry
at the time, Kendall as a timber merchant and
Farey as a cotton mill owner. It was a natural
impulse for them, given the spirit of the era, to
want to extend their good fortune to others.”
Ironically, things have come full circle, and the
ongoing global financial crisis, and its impact
on society and individuals, has made such
values as relevant today as they ever were.
Under their watch, the Society grew rapidly
from its modest membership of 223 with almost
£3,000 in balances in 1854, to 1,185 members
and closer to £50,000 in savings by 1879, moving
premises periodically to accommodate its
expansion, and finally inhabiting the purpose-
built headquarters we have today.
The legacy of these inspirational characters
lives on in Skipton, with a stained glass window
in the town’s Holy Trinity Church dedicated to
Kendall, and a number of local schools which
resulted from their impressive contribution to
education in the area.
However, nowhere does it live on more strongly
than in the ethos of the Society as it is today,
despite the fact that the way in which we do
business has undoubtedly moved on. We now
have more than 744,000 saving and borrowing
members nationally, served by a network of
over 100 branches and agencies, as well as
online and telephone services. Our assets total
almost £14bn and we own a uniquely diversified
Group of successful subsidiary companies.
However, our driving force has stood the test
of time and we remain dedicated to enabling
people to own their own homes. Even in
today’s difficult housing market, we are lending
strongly. We do this by providing our savers
with good value accounts, and then lending out
the money they deposit with us. It is a simple
and prudent equation which has proved its
worth over the years, and ensured that we have
remained strong and able to continue serving
our members now and into the future.
The visionaries who
made it all possibleThen and now
1853 2013
Samuel Farey and
others form the Society 1929 1931 1953 1990
The Bailey head
office is built
2003
The Society’s
150th anniversary

That’s because the reality is that 49 per cent
of parents aged 50 and over have already
had to dip into their savings to get by. And
four in 10 have been giving their children
hand-outs to help them with spiralling costs
such as higher education fees, driving
lessons and rent payments.
The good news is that Skipton can help
when it comes to forging a path through
the inheritance maze, through our Skipton
Financial Services Limited (SFS) business
and its Diploma qualified financial planning
managers located in every branch.
Gary Munroe (right) is one of them, based
at our Ilkley branch.
He said he witnesses
people’s shyness
over discussing the
inheritance question
all the time.
“Whatever their
aspirations for their
accumulated wealth, people spend a lifetime
working hard to build it, but are prepared
to gamble it away by not making provisions
while they are alive,” he said.
“I do understand that it’s hard to talk about no
longer being around, particularly with those
we love most, but I can’t stress how important
it is to overcome that trepidation and get some
proper plans made and recorded.
“Otherwise, people risk having their estates
significantly depleted by inheritance tax they
needn’t have paid, and their loved ones losing
out on what they would have wanted for them.”
FACT BOX
Six good reasons to plan ahead
Reduce or eliminate any inheritance tax
bill, saving your family money after your
death;
Ensure your estate is distributed as you
would like;
Speed up the probate process;
Reduce the burden or stress on loved
ones during what will already be a very
difficult time;
Peace of mind that your loved ones are
provided for after your death;
HM Revenue Customs (HMRC) figures
show that the Taxman’s inheritance
tax income has risen by 21% since the
Government froze the threshold at
£325,000 in 2010. In 2009/10, £2.4bn was
collected, rising to £2.72bn in 2010/11
and then £2.9bn in 2011/12. All the more
reason to do what you can to minimise
your bill!
E
veryone has a different view
about inheritance. Some people
with families may be very focused on
leaving a legacy for their children and
grandchildren, while some believe their
offspring should stand on their own two
feet and make their own way in life.
Meanwhile, others are more interested in
making the most of their resources and living
life to the full while they’re still around, and
aren’t concerned with leaving anything behind.
Whatever your circumstances, or perspective
on this important issue, failing to face up to it
can store up trouble for the future. Not having
a ‘plan’ can mean your wishes aren’t honoured
when the time comes.
We surveyed 2,000 people across the
UK and discovered some stark contrasts
between the views of different generations
on inheritance, highlighting the importance
of facing up to this difficult discussion point
at an early stage.
The majority (75 per cent) of the grown up
children, aged 20 to 35, we surveyed, told
us that they expect to receive a nice little
nest egg from their parents when they pass
away, amounting to an average of £78,000.
Based on current trends though, four in 10 of
them won’t get a penny.
The children
• Specific items children hope to inherit
include the family home (68 per cent) and
a cash lump sum (67 per cent);
• 20 per cent have high hopes of making it
onto the property ladder for the first time
through their inheritance windfall.
Their parents
• 84percentofadultsaged50andoverthink
savings are better spent now, whenever
their family needs a helping hand, rather
than leaving a large inheritance sum;
• 95 per cent think their offspring need to
take more responsibility for their own
futures.
what we found out
Make an appointment with a SFS financial planning manager...
call 0845 603 4735 or visit your local branch skipton.co.uk/branches
Inheritance – the generation game
Inheritance can be a difficult
subject for families to broach.
However, not doing so can lead to
worrying misunderstandings, as our recent
survey showed.
SFS offers Restricted Advice. Investments recommended as part of the Inheritance Tax planning
solution may not guarantee the return of your original capital and the level of income taken from
your investments is not guaranteed and may rise and fall. The tax treatment of investments
depends on your individual circumstances and may be subject to change in the future.

R uss (60) and Linda (57) are customers
of our Lincoln branch. This year, they
have found themselves rather unexpectedly
retired, but that’s not going to stop them
enjoying the next stages of their lives. They
live with their dog, Saxon, and have two
grown up children aged 31 and 34. To them,
life after work means...
We’ve given up
work, not life!
Linda: We have lots of
aspirations now that we’ve
stopped working, and see it
as the start of a new era in our
lives, rather than an end. We have a caravan and
have enjoyed great family holidays in France
over the years. Now we can spend more time
away touring the country and not be limited to
just two weeks a year.
Russ: I know what I won’t do instead of working,
and that’s spend my time watching TV! That’s
alien to me and I have other ideas. I’d really like
to undertake some higher education, perhaps
something in English history through the Open
University. I’m not sure if it’s an age thing but
since I’ve got older and have travelled around
the UK and France, I’ve become really interested
in history!
Money, money, money...
Russ: Our preparations for when we stopped
working have been in the pipeline for years.
During our working lives, we never lived beyond
our means, but were fortunate enough never
to go without anything we needed either. We
still live in our family home, so if necessary we
could downsize. We also regularly review our
finances, to make sure everything’s working as
hard for us as possible. Skipton recently helped
us make our Wills, which is something important
that we’d put off doing for far too long.
Making more of our
hobbies
Russ: I stopped smoking
shortly before the kids
were born and decided
to use the money I used
to spend on cigarettes, to do
something for the family instead. So I saved up
and bought my first SLR camera. Fast forward
35 years and I’m still snapping away. But until
now I’ve had to squeeze my photography in
around work, so I’m really looking forward to
not having this constraint, and having more
time to develop new photography skills. Who
knows, I might even enter a few competitions
or local exhibitions!
Life after
work
Taking a new direction after
a busy working life is on
the horizon for all of us. For
members Russ and Linda
Dickens, this important life
stageisjustaroundthecorner.
They share what it means
to them and how planning
ahead has helped them to
cope with the unforeseen.
For help plotting your financial life journey…
pop into your nearest branch or call 0845 603 4735 to make an appointment
Unforeseen circumstances
Russ: Finishing work this year wasn’t
planned, but the company where I’d worked
as a Manufacturing Technician for 20 years
decided to close my plant. We just had to
bring our preparations forward a little bit and
that was that.
Linda: Psychologically, I don’t see myself
as retired. People have a stereotypical
view of retirement, but I think everyone’s
circumstances are unique. After being
made redundant when I was in my early 50s,
following a long career in customer services,
I took short term jobs thinking that would see
me through until I could give up working at 60.
It hasn’t quite worked out that way because
jobs are now hard to come by, and the State
pension age has increased for me. But we’ve
just had to get on with things and adapt to
these circumstances.
Worry free
Linda: We’ve
deliberated for
years over our
post-work
plans. Then,
when Russ’s
company shut
down, after the
initial shock we
actually felt a little bit
relieved that the decision on when would be
the best time for him to stop working had been
made for us. Now we don’t need to worry if
we did the right thing, or if we could afford it,
because it was taken out of our hands.
Russ: There’s more uncertainty than ever
over retirement and the support which is or
will be available for people at the end of their
working lives. Therefore, you have to embrace
change. I won’t allow myself to be worried
about retiring, as many of the issues, such as
the cost of living, utility bills and fuel prices,
are out of my control. We’re really looking
forward to getting on and enjoying it. Yes we
have some concerns, who doesn’t? But our
way of dealing with these is to have plans
in place, review our finances regularly, seek
expert guidance when we need it and try to
keep any worries in perspective.
It’s never too early to start planning ahead
and Skipton can offer help with everything
from savings to mortgages and insurance.
Because all of our branches have highly
qualified financial planning managers from
our Skipton Financial Services Limited (SFS)
subsidiary, we can also help with investments,
pensions and inheritance tax planning.
SFS offers Restricted Advice. Many of the products available from SFS are not like
building society or bank deposit accounts, as the capital value and any income can rise
and fall and your capital is at risk. The tax treatment of any investments depends on
your individual circumstances and may be subject to change in the future.

Offering outstanding service tailored to
your individual needs is our driving
force, and we’ve invested significantly over
the past year in improvements to help us
achieve this.
Our state-of-the-art new
telephony system has
been the biggest single
service development
in 2012.
This will help our Skipton
Direct customer service
team deal with your calls even
more efficiently, not least by getting you
through to the right person to address your
needs as quickly as possible. Claire Davey,
Head of Skipton Direct (right), said: “We all
know the things we value, as customers, when
dealing with businesses over the telephone.
For example, accessing British call centres and
being able to speak to real people.
“We’ve reflected
on our own
experience and
feedback from
our customers,
and have invested
in the new
telephony system, which we believe
appropriately reflects the ‘human’
approach we try to take when
meeting our customers’ needs.”
We’re also making the most of new
technologies to help us keep you informed.
One example is the text alert service we’ve
introduced for ISA transfers, where we can
now send you a message to confirm that
your money has arrived from your old
provider into your new Skipton account.
And then there’s our ongoing branch
refurbishment programme. This will ensure that
the personal service-with-a-smile you value so
much is backed by comfortable environments
which make it easy for you to manage your
finances there. Branches which have received
a spruce up this year include Harrogate and
Hexham, and we’re gradually introducing our
new, more modern branding as we go.
OfficialRecognition
Our success in providing relevant products
which meet your needs, supported by
excellent service, was recognised with a
number of prestigious industry awards
during 2012.
We retained What Mortgage magazine’s ‘Best
National Building Society’ award for the second
year running, and were handed a ‘Five Star
Service Excellence’ award by Financial Adviser
magazine.
We also held on to our Customer First
accreditation, which recognises organisations
achieving the highest standards in customer
service. In 2006, we became the first financial
services organisation to achieve Customer First
status, and we have kept it ever since, through
a number of regular reassessments.
However, despite these various accolades, we
are never complacent. We continually review
the service we offer and listen to feedback, to
ensure we remain the best we can possibly be
for our members.
We’re still there for you
when others aren’t
You may have read in the news how many
financial organisations have withdrawn their
advice services. Well, we’re pleased to say
that this isn’t so at Skipton.
The Financial Services Authority has
recently implemented its Retail Distribution
Review (RDR), which sets out a range of
new standards advisers have to adhere to
when providing advice to consumers. As a
result of this far reaching new regulation,
many providers have restricted their advice
to high net worth clients only, or are limiting
it to a small selection of their own products
and services.
By contrast, we recognise that the global
financial crisis and ever-more-complex
marketplace, mean that people need a
helping hand now more than ever. Which
is why we remain committed to helping our
customers improve their financial wellbeing.
All Skipton branches have qualified financial
planning managers from our subsidiary,
Skipton Financial Services Limited (SFS).
Although under the new RDR rules they
offer Restricted Advice, they can advise on
a wide range of investment options as well
as pensions and inheritance tax planning.
In addition, for members who maybe don’t
need to call on the expertise of SFS, we have
introduced our new My Review service.
Available to every member at no cost, this
has helped more than 20,000 people get the
bestfromtheirfinancessinceitwaslaunched
last May.
At your service
SFS offers Restricted Advice. Many of the products available from SFS are not like
building society or bank deposit accounts, as the capital value and any income can rise
and fall and your capital is at risk. The tax treatment of any investments depends on
your individual circumstances and may be subject to change in the future.

223 members
£2,951 assets
1853
The inaugural
meeting of the Society
is held in Skipton’s old town hall
2013...
2003
1854
1865
Slavery abolished in
the United States
1876
Alexander Graham
Bell invents
the telephone
1929
New head office
opened at
59 High Street 1945
Assets of £5 million
1958
The cassette
tape is launched
1963
1977
Introduction of the first mass-produced
personal computers
1978
The Society
now has 32
branches
75 agencies
throughout
the UK, with
assets of
£150 million
1990
Tim Berners-Lee
invents the World
Wide Web
The Society’s 150th
anniversary
The Bailey head
office is built
2000
Assets of
£6 billion
2008
MY BUILDING SOCIETY
Society’s 160th
anniversary
We celebrate the
2012

2. Mike Ellis Chairman
Mike joined the Board as Non-Executive
Chairman in 2011 and also chairs the
Nominations Committee. Mike was Group
Finance Director at HBOS plc after serving as a
Director of Halifax plc, where he held a number
of senior executive positions having joined its
predecessor, Halifax Building Society, in 1987.
From 2005 until January 2013, he was a Non-
Executive Director and Chairman of the Audit
Committee at WH Smith PLC. In 2007, he was
awarded the OBE for his contribution to UK
financial services.
4. Marisa Cassoni Non-Executive Director
A Chartered Accountant, Marisa joined the
Board in 2012. She chairs the Audit Committee
and is a member of the Nominations
Committee. Marisa retired as Group Finance
Director of the John Lewis Partnership in 2012.
Prior to that, she held senior positions at Royal
Mail, Britannic Assurance and the Prudential.
Marisa is also a Non-Executive Director of GFI
Group Inc.
5. Ian Cornelius Commercial Director
Ian joined the Skipton Group in 2011. He became
Commercial Director with responsibility for
products and marketing in 2012, having
previously been Commercial Director at our
subsidiary Homeloan Management Limited
(HML). He is a member of the Executive
Committee and Chairman of our subsidiaries
Amber Homeloans Limited and North Yorkshire
Mortgages Limited. Ian formerly held senior
roles at Virgin Money, Bradford Bingley,
Capital One and Boots.
1. David Cutter Group Chief Executive
David, a Chartered Accountant, joined
the Society as Head of Audit in 1993, was
appointed to the Board in 2000 and became
Group Chief Executive in January 2009. He is
Chairman of the Society’s Executive and Retail
Credit Committees, and a member of the
Asset Liability and Board Risk Committees.
Externally, he is Deputy Chairman of the
Building Societies Association.
3 Noel Hutton Vice Chairman
Noel joined the Board as a Non-Executive
Director in 2004. He is a member of the
Nominations Committee and Chairman of the
Remuneration Committee, and was appointed
Vice Chairman in 2010. Prior to retiring in 2004,
he was a partner in international law firm
Hammonds, now Squire Sanders, where he
specialised in corporate finance.
6 Robert East Non-Executive Director
Robert joined the Board in 2011 and is a
member of the Board Risk, Nominations and
Remuneration Committees. Robert spent most
of his career with Barclays PLC, undertaking
senior roles in retail and commercial banking.
He is now Chief Executive of Cattles Limited.
7. Mark Fleet Distribution Director
Mark became Managing Director of Skipton
subsidiary Skipton Financial Services
Limited in 2008, and then the Society’s Chief
Distribution Officer and a Board Director in
2011. He oversees the Society’s distribution via
the Branch network and Skipton Direct and
is a member of the Executive and Conduct
Operational Risk Committees. Mark also chairs
our Mortgage Services division and our three
financial advice businesses. His career has
spanned distribution, customer services and
credit management. Prior to joining Skipton he
worked in subsidiaries of Standard Chartered
Bank, Lloyds TSB and Bank of Ireland.
8. Peter Hales Non-Executive Director
Peter joined the Board in 2007 and is
Chairman of the Board Risk Committee and a
member of the Nominations Committee. Prior
to that, he was Sales and Marketing Director
of Norwich Union, having previously been a
Director of General Accident and CGU. Peter
is also a Director of Unum Limited, Chairman
of Sandringham Financial Partners Limited, a
Trustee of the Chartered Insurance Pensions
Scheme and a member of the Advisory Board
of Simply Biz plc.
9. Graham Picken Non-Executive Director
Graham joined the Board in 2012 and is
a member of the Audit, Board Risk and
Nominations Committees. Graham previously
worked for HSBC, where he held positions as
Executive Chairman of First Direct and Chief
Executive of the Forward Trust Group. Between
2005 and 2009, he was Non-Executive Director
and then Chief Executive of the Derbyshire
Building Society. Graham is Chairman of the
FTSE listed HICL Infrastructure Company
Limited.
11. Richard Twigg Group Finance Director
Richard is a Chartered Accountant and joined the Skipton Group in 1993. He was appointed to
the Board in 2002 as Group Finance Director, having been Finance Director of our subsidiaries
HML and then Connells Limited. He is Chairman of the Society’s Asset Liability Committee and
a member of the Executive, Risk and Conduct Operational Risk Committees, with additional
responsibility for Skipton International Limited and the Society’s investment portfolio. Richard is
also a trustee of the Society’s Charitable Foundation.
10. Peter (Nimble) Thompson Non-Executive Director
A solicitor by profession, Nimble joined
Skipton’s Board in 2009, following our merger
with Scarborough Building Society. where he
had been a Non-Executive Director for three
years. He sits on our Remuneration, Audit
and Nominations Committees. Nimble was
a Senior Partner and then Deputy Chairman
of Eversheds before retiring in 1999. He is
Chairman of N G Bailey Limited and holds
a number of other Non-Executive positions
nationally.
11
7 3
10
4
1 2 5 8
69
Meet the Board
Helen Stevenson
Non-Executive Director
Helen started her
professional life with Mars Inc
where she spent nineteen
years, culminating in her
role as European Marketing Director.
She joined Lloyds TSB in 2003 as Group
Marketing Director, where she was
responsible for the Group brands and for
the customer experience. Between 2006
and 2011 she was Chief Marketing Officer
at Yell Group. She is a Non-Executive
Director of St Ives PLC and Henley
Business School Advisory Board.
Cheryl Black
Non-Executive Director
Cheryl has spent her
career in customer service
and operations. Following
leadership roles at Orange
and NTL, she was appointed to the Board
of Scottish Water in 2002. Between 2006
and 2011, Cheryl was Customer Service
Director at Telefonica O2. She is currently
a Non-Executive Director at Southern
Water Services Ltd, Director of Telefonica
UK Pension Trustee and Non-Executive
Board Adviser to EDF Energy Nuclear
Generation Ltd.
Cheryl Black and Helen Stevenson were appointed to the Board with effect from 1 March 2013

This year’s Annual General Meeting (AGM) of Skipton Building Society will be held at the
Skipton Building Society Principal Office, The Bailey, Skipton, North Yorkshire, BD23 1AP on
Monday 29 April 2013 at 6.30pm for the following purposes:
Rule Changes
The Board is proposing a number of changes
to the Society’s Rules at this year’s AGM.
Please see pages 22 and 23 for details of
what we are proposing to change and why.
A copy of the document setting out the
proposed amendments and a copy of the
existing Rules showing the proposed changes
are available on the Society’s website
at skipton.co.uk/rules, or may be obtained
by a member on request to the Secretary,
Skipton Building Society, The Bailey, Skipton,
North Yorkshire BD23 1DN.
The Board believes that these alterations
will benefit the Society and its members
and recommends that members vote FOR
the alterations.
Voting instructions
As a voting member, you have the
right to vote on matters affecting
your Society. Register your vote in
any of the following ways:
Online
Just log on to skipton.co.uk/agm or use the
link on our homepage at skipton.co.uk then
follow the instructions. You will need the two
part security code printed on your voting
form. Online voting is available 24-hours-a-
day until 5pm on Tuesday 23 April 2013.
If you vote online and subsequently change
your mind, you can vote again using the
same two part security code. If you vote
by post as well as online, then the last vote
received is the one that will be counted.
By Freepost
Please complete, sign and date the voting
form, then place it in the enclosed Freepost
envelope and post it to arrive by 5pm on
Tuesday 23 April 2013.
At a branch
Please complete, sign and date the voting
form, then place it in the enclosed Freepost
envelope and put it in the ballot box at any
of our branches by 3pm on Friday 19 April
2013.
Attend the AGM
Come to the AGM at 6.30pm on Monday 29
April 2013 at our Principal Office, The Bailey,
Skipton, North Yorkshire BD23 1AP. Please
also bring your passbook, share certificate
or other evidence of membership to enable
entry. The venue is wheelchair accessible.
If you plan to attend the AGM and require
a sign language interpreter, hearing loop or
have any other special requirements, please
let us know by Monday 15 April 2013.
Notice of 2013
Annual General Meeting
Ordinary resolutions
1. To receive the Report Accounts
2. To re-appoint KPMG Audit Plc as auditors
3. To approve the Report on Directors’
Remuneration
Elections of Directors
4.1 To elect Cheryl Campbell Black
4.2 To elect Maria-Luisa Cassoni
4.3 To elect Ian Michael Cornelius
4.4 To elect Helen Claire Stevenson
4.5 To re-elect David John Cutter
4.6 To re-elect Robert David East
4.7 To re-elect Michael Henry Ellis
4.8 To re-elect Mark Russell Fleet
4.9 To re-elect Peter Robert Hales
4.10 To re-elect Charles Noel Hutton
4.11 To re-elect Graham Edward Picken
4.12 To re-elect Peter John Stuart Thompson
4.13 To re-elect Richard John Twigg
Special Resolution
5. To consider and, if thought fit, to pass
the following resolution as a Special
Resolution:
That the Rules of the Society be amended
in the manner specified in the document
produced to the meeting and initialled
by the Chairman for the purposes of
identification.
Notes that form part of this Notice of AGM
can be found adjacent.
By order of the Board
John Gibson
Secretary
1 March 2013
Voting Notes
1. The voting date is 23 April 2013 if you are using
the voting form or voting online, or 29 April 2013 if
you vote in person at the AGM.
2. You are entitled to vote if you are at least 18 years
old on the date of the AGM and are the first
named account holder in our records. You must
also either:
a) have had at least £100 in your savings accounts
(including Permanent Interest Bearing Shares
(PIBS)) on 31 December 2012 and continue to
have a savings account with the Society at all
times between 31 December 2012 and the voting
date, or
b) have owed the Society not less than £100 on
your mortgage(s) both on 31 December 2012 and
on the voting date.
3. No matter how many savings or mortgage
accounts you have, in any capacity, you are only
entitled to one vote on each resolution.
4. You may either vote in person at the AGM
or you may use the voting form to appoint a
representative to attend and vote for you as
you direct. You may appoint the Chairman of the
Meeting or anyone else as your representative;
they do not have to be a member of the Society.
5. Your representative may vote for you at the AGM
on a written poll but not on a show of hands.
6. Please remember to sign the declaration on the
voting form as only signed forms will be valid.
7. If you appoint a representative to vote on your
behalf and your representative does not attend
the AGM, your vote will not be counted.
8. A vote withheld is not a vote in law, which means
that the vote will not be counted in the calculation
of votes for and against the resolution.
9. Members attending the AGM in person will
be required to produce their passbook, share
certificate or other evidence of membership
to gain entry to the AGM. Representatives will
also need to produce an appropriate form of
identification to gain entry to the meeting.

E very now and again, we need to review
our Society Rules, to make sure they
remain in-step with the latest developments
and how we do business. This is why, as
you will probably have noticed, Agenda Item
5 in your Notice of AGM this year features a
proposal to amend the Rules of the Society.
The last time we reviewed our Rules was in 1998
and we have decided it is time to do so again to
better reflect modern working practices.
Our proposed new Rules closely reflect the
wording in the Building Societies Association’s
Model Rules, which were developed in
consultation with the Financial Services
Authority.
On page 23, we will explain the main areas
of change, with examples for each. If you
would like a full copy of our existing Rules,
with the proposed alterations highlighted,
and a full outline of all the amendments,
these are available via our website
at skipton.co.uk/rules, or from the Secretary,
Skipton Building Society, The Bailey, Skipton,
North Yorkshire, BD23 1DN.
Our Board believes that these alterations
will benefit the Society and its members, and
recommends that members vote FOR the
alterations.
If the Rule changes are approved at the AGM
and registered by the Financial Conduct
Authority, it is intended that the changes would
take effect from 1 August 2013.
Electronic communications
Therehasbeensubstantialgrowthinelectronic
communications affecting building societies
since the Society’s Rules were last changed.
This covers the full range of communications,
including those relating to meetings. These
amendments reflect changes to enable us
to use electronic communications to send
notices and documents, as well as serving
notices, carrying out ballots and making and
removing proxy voter appointments.
(See changes to Rule 1, Rule 32(5) to (8), Rule
36, Rule 38 and Rule 45(2) and (7)).
Other related changes
We’ve also made a number of practical
amendments to cater for electronic
addresses (such as email addresses), to
provide us with greater flexibility to accept
signatures in forms other than conventional
manuscript, and to enable us to use an
electronic Society seal where appropriate.
(See changes to Rule 1 and Rule 41(6)).
Meetings etc.
These changes govern how many members
must be present for a meeting to be
‘quorate’, when the Chairman can announce
the results of a formal vote taken at a
meeting, who can speak at meetings and
how and in what timescales we may notify
members about a meeting. We draw your
specific attention to Rule 36(5) where a
change will allow proxy voters to speak at
general meetings.
(For other changes see Rule 33(1), Rule 34(14)
and Rule 45(6)).
Directors/Board
Our provisions regarding directors and
our Board are also being updated. These
changes relate to the rights of our directors
to delegate by power of attorney and
to update how the Board delegates to
committees, the impact of the Equality Act
2010 on normal retirement ages for directors,
and in what circumstances a director can
give up or be made to give up office.
We are also amending the Rules so that
all directors will retire from office and, if
appropriate, seek re-election by members
annually at each AGM. The number of
members that are required to support a
member standing for election as a director
is being increased in line with the figure
applying to the Society in legislation.
(See changes to Rule 12 (4) (h), Rule 13 (1) (a)
and (d), Rule 16 (3)/(4), Rule 24 and Rule 26).
Terms and conditions
Since we last fully updated our Rules in 1998,
we have increasingly included mortgage
and savings account terms and conditions
in our product literature. We have therefore
shortened some of our Rules to reflect this,
e.g. Rules 8(4) and 12(5).
We have also reviewed and amended
some of our other terms and conditions-
related provisions in light of regulatory
and best practice developments. These
changes clarify steps we must follow when
considering closing a member’s account,
notifying members of changes to their terms
and conditions or considering whether or
not to refuse to open a new account.
(See changes to Rule 4(7), Rule 8(4) and
Rule 8(9)).
Proposed alterations to the
Society’s Rules
Society Rules
The Society’s Rules old and new

Summary Financial Statement
This financial statement is a summary of information
from the audited Annual Report Accounts, which
will be available to members and depositors online
at www.skipton.co.uk/performance or free of charge
on demand at every office of Skipton Building
Society from 2 April 2013.
Summary Directors’ Report
It is pleasing to report that we have achieved a
robust and balanced performance over the past
year, combining ongoing financial success with a
member-centric approach to doing business.
Celebrating our impressive heritage in our 160th
anniversary year, we continue to focus on meeting
our members’ needs through long term good value,
relevant products, and a commitment to outstanding
personal service.
Continued, prudent growth
In 2012, the Society achieved steady growth in
mortgage balances, retail balances and capital,
as well as significantly improving profitability.
Our strategy of growing steadily, while remaining
focussed on meeting our members’ needs, has
helped the Society to improve its performance in a
difficult operating environment.
The key driver of the Group’s improved performance
has been an £18.4m turnaround in our Mortgages and
Savingsdivision,returningtoprofitabilityandreporting
a profit of £4.9m compared to a loss of £13.5m in
2011. This is despite a £6.1m (2011: £5.4m) contribution
to the Financial Services Compensation Scheme
(FSCS) within the division, as a result of continuing to
pay for the banking crisis of 2008. The improvement
in our net interest margin, an important driver of
sustainable profitability for the business, is also
encouraging, and increased to 0.61% for the full year
compared to 0.52% in 2011.
Capital and liquidity are two important indicators of
our financial strength, and both remain robust, as
outlined below. The quality of our liquidity remains
excellent, with no exposure to Greece, Ireland, Italy,
Portugal or Spain.
We have maintained a strong funding base, with
a high proportion of retail funding and a degree
of cost effective wholesale funding to achieve a
desirable blend. By the end of the year, 83.1% of
our total funding was derived from retail savings
balances (2011: 80.2%), covering 90.1% of our
mortgage lending (2011: 91.4%). Complementing this
solid retail base, we raised £475m of funding from
our second securitisation in 18 months – a sign of
the market’s confidence in the Society.
Arrears continue to fall, as summarised below, and
are now lower than the industry average.
At the same time, impairment losses, predominantly
within our Mortgages and Savings division, also fell
significantly, to £12.3m, compared to £30.0m in 2011.
However, Group provisions for liabilities increased to
£28.7m compared to £13.5m in 2011, primarily due to
total Group FSCS levies of £7.5m (2011: £5.8m), claims
against surveys and valuations within our Estate
Agency division of £8.4m (2011: £6.1m), provisions
for commission clawbacks / rebates of £6.2m (2011:
£(0.2)m), and customer compensation provisions
for MPPI claims and compensation payable to
customers as a result of issues identified from our
review of past business within the Financial Advice
division of £3.7m (2011: £2.1m).
Help for Homeowners
Remaining true to this powerful founding principle,
we again continued our support of borrowers during
what continues to be a difficult housing market.
Gross mortgage lending totalled £1.5bn for the year
(2011: £1.7bn), a continued strong performance after
the threefold uplift in 2011.
Financial strength
• Core Tier 1 capital of 11.1% compared to 10.5% at the end of
December 2011;
• Total capital also improved to 15.9% (2011: 15.5%);
• Strong liquidity ratio maintained at 21.1% of shares, deposits
and liabilities (31 December 2011: 24.8%);
• Only 1.30% of mortgages have arrears of more than 2.5% of
the total outstanding balance (31 December 2011: 1.45%). This
compares to the industry average of 1.401
% (31 December
2011: 1.42%).
Profitability
• Pre-tax profits of £36.4m
(2011: £22.2m), up 64%;
• £13.0m improvement in our
net interest margin (2012:
0.61%, 2011: 0.52%);
• Continued strong earnings
from the Estate Agency
division, with profits of
£36.2m (2011: £35.8m).
Our key financial highlights were as follows:
Net lending amounted to £356m, compared to £412m
in 2011, as mortgage balances increased by 3.5%
during the year to £10.5bn (2011: £10.1bn). Our 4.1% share
of the growth in the UK mortgage market compares
favourably to our natural market share of 0.8%.
We achieved this by providing solutions for a wide
variety of homeowners, including those unable to
provide a large deposit. 91% of the Group’s gross
lending is undertaken by the Society, and of this
amount, 4.7% (2011: 4.5%) was to borrowers with a
loan-to-value ratio of between 90% and 95%. 16.1%
(2011: 19.5%) of the Society’s gross lending went
towards helping 1,833 (2011: 2,648) first time buyers,
and Buy-to-Let mortgages for property investors
also featured strongly, at 12.9% (2011: 7.5%) of the
Society’s overall lending, reflecting the increasingly
important part they play in the overall health of the
UK mortgage market.
Our mortgage offering was independently endorsed
when What Mortgage magazine gave us their ‘Best
National Building Society Award’ for the second year
running in 2012. We were also highly commended
and commended, respectively, in the ‘Best First Time
Buyer Mortgage Provider’ and ‘Best Building Society
Mortgage Provider’ categories at the prestigious
Moneyfacts Awards 2012. Our outstanding service
was recognised with a ‘Five Star Service Award’ from
Financial Adviser magazine.
Promoting Savings
We are acutely aware that savers remain the
‘forgotten victims of the credit crunch’. Their
nominal returns are severely affected by keeping
the Bank of England Base Rate at 0.5%, and their
real returns are impacted by inflation.
UK monetary policy remains focussed on trying to
stimulate growth and avoiding deflation, and the
beneficiaries have been borrowers. Savers, on the
other hand, continue to suffer.
In recent months, their plight has been
compounded by the introduction of the Funding
for Lending Scheme, again aimed at stimulating
the housing and mortgage markets by making
more affordable credit available to borrowers.
Access to this new and cheaper source of funding
has lessened the demand for retail savings and
hence the rates payable to savers have declined.
New mortgage rates have also fallen as funding is
more available for lenders to deploy.
With the very best of intentions we must operate
within our market environment, in order to manage
the business responsibly in the best interests of
all our members. Hence, we have also reduced
our own new mortgage rates and savings rates in
recent months.
We recognise that this is cold comfort for those
savers who are affected, but we have endeavoured
to maintain our rates at levels which continue
to compare favourably with other High Street
providers.
In spite of Bank Base Rate remaining at 0.5% for
four years, the average savings rate paid across all
of our accounts at 31 December 2012 (i.e. instant
access or term accounts) was 2.56%, exactly the
same figure as at 31 December 2011. Within the
confines of such a low interest rate environment,
and difficult market conditions, we continue to try
to preserve long term saver value.
Our continued efforts to help people manage
their finances responsibly, by saving, resulted in a
2% increase in our savings balances during 2012, to
£9,462.4m compared to £9,280.4m at 31 December
2011.
We achieved this by listening to our members in
order to provide products relevant to their needs,
launching a range of new accounts including base
rate tracker bonds, fixed rate bonds and regular
savers, as well as a Christmas Regular Saver,
enabling people to put away cash for future festive
seasons instead of getting into debt to fund their
celebrations.
Believing that everyone should have a tax-
efficient account in their savings portfolio, another
successful ISA season saw us encourage twice as
many people to embark on tax free savings as we
did in the same period of 2011.
1
Source: Council of Mortgage Lenders, published 14 February 2013.

Focussed on our members
The consistent good value we offered across our
savings and mortgage ranges during the year was
endorsed by 528 media ‘best buy table’ mentions
during the period.
Recognising that our members need help and
advice, now more than ever, in navigating a path
through the financial maze, we have underlined
our commitment to supporting them. Firstly, we
will continue to arrange expert financial advice
through the Diploma-qualified financial planning
managers within our Skipton Financial Services
(SFS) subsidiary in each branch. We are doing so
at a time when many providers have withdrawn
their financial advice services in the wake of the
Financial Services Authority’s Retail Distribution
Review, have restricted their availability to only high
net worth clients, or are limiting the advice they
give to a small selection of their own products and
services. By contrast, Skipton customers continue to
have access to a wide range of investment options,
as well as expertise in areas such as pensions and
inheritance tax planning.
And this is not the only help we offer our members
in getting the most from their finances. Last May,
we introduced our new My Review service, which
is available to every member at no cost and has
helped more than 20,000 customers since launch.
During 2012, we also ran an extensive Free Wills
promotion, providing almost 9,000 single and mirror
wills during the year, benefiting more than 13,000
customers.
Our commitment to offering our members
outstanding personal service has also come to the
fore over the past 12 months, as we have introduced
a number of enhancements. Quick, online Decision
in Principles, and text updates on mortgage
applications and ISA transfer progress, are two
examples of innovations we have made to help our
borrowers and savers.
We have also continued to invest in our frontline
customer service. The great work of our Skipton-
based customer service team has been augmented
by the installation of a new telephone system which
provides a call-back option to save customers
queuing and requires that they select a maximum
of two options before getting through to a customer
adviser who can help them. Dedicated numbers for
specific queries mean that, in most cases, they get
straight through to the right person.
Understanding, from member feedback, that they
value face-to-face service from a strong branch
network, we have refurbished 15 branches over the
past year, as part of our ongoing modernisation
programme.
As a mutual, owned by our members, we believe it
is important to involve them in shaping the future
direction of the Society. Since we introduced it in
the Autumn of 2011, more than 2,800 customers
have signed up to our Customer Panel, to have
their say on everything from our role in our
communities to products and communications.
This is complemented by an extended range
of customer communications, including our new
My Society newsletter launched in June.
Subsidiary performance
Our group of subsidiary companies continues
to make a welcome contribution to the Society’s
success. Our Estate Agency division, the Connells
group, provided pre-tax profits of £36.2m,
compared to £35.8m in 2011. This was an impressive
result given the ongoing uncertainty facing the UK
housing market.
Our mortgage servicing business, Homeloan
Management Limited (HML), also moved back into
profit. It achieved a pre-tax profit of £0.8m, following
a loss of £3.1m in 2011, having gained a number
of new clients and extended several existing key
relationships. However, our Financial Advice division
incurred a pre-tax loss of £0.9m compared to a
profit of £2.9m in 2011. While the revenue generated
by these businesses increased during 2012, we
have made provisions for compensation payable to
customers as a result of issues identified from our
review of past business.
Outlook
Uncertainty regarding economic growth, and the
state of the Government’s finances, will continue
to hang over the UK economy and dominate fiscal
and monetary policy. While we are pleased with
the further upturn in our performance over the
past year, we are not complacent and maintain a
prudent eye on further potential external shocks
which could impact the Society.
However, despite such developments, we are
confident we will achieve further improvement
during 2013 and beyond, as the strength of our
Mortgages and Savings division, in particular,
continues to gain momentum.
Since the year end, we have utilised funding
available from the Funding for Lending Scheme, as
we continue to increase our lending to borrowers.
Meanwhile, we will remain focussed on satisfying
the saving and investment needs of our customers.
Group results for the year ended 31 December 2012
£m
2011
£m
Net interest receivable 84.2 71.2
Other income and charges 403.7 375.4
Profit on disposal of subsidiaries - 0.9
Fair value gains 3.6 3.0
Administrative expenses and provisions for liabilites (438.8) (398.3)
Impairment losses (16.3) (30.0)
Profit for the year before taxation 36.4 22.2
Taxation (8.8) (6.7)
Profit for the financial year 27.6 15.5
Non-controlling interests 1.0 (0.1)
Profit for the financial year attributable to members 28.6 15.4
Group financial position at 31 December 2012
£m
2011
£m
Assets
Liquid assets 2,531.8 3,020.6
Residential mortgages 10,070.9 9,713.8
Commercial and other loans 522.6 539.0
Derivative financial instruments 202.7 216.3
Fixed and other assets 432.2 420.6
Total assets 13,760.2 13,910.3
Liabilities and reserves
Shares 9,462.4 9,280.4
Borrowings 2,536.2 2,905.2
Derivative financial instruments 370.8 374.4
Other liabilities 235.3 210.4
Subordinated liabilities 223.9 228.2
Subscribed capital 96.1 95.2
Non-controlling interests 1.8 2.8
Reserves 833.7 813.7
Total liabilities and reserves 13,760.2 13,910.3
Group statement of movement in reserves 2012
£m
2011
£m
Reserves at 1 January 813.7 818.0
Net expense for the year not recognised in the Income Statement (8.6) (19.7)
Profit for the year 28.6 15.4
Reserves at 31 December 833.7 813.7
This summary financial statement was approved by the Board of Directors on 27 February 2013 and was
signed on its behalf by:
M H Ellis Chairman
D J Cutter Group Chief Executive
R J Twigg Group Finance Director

Summary of key financial ratios 2012
%
2011
%
Gross capital as a percentage of shares and borrowings 9.63 9.35
Liquid assets as a percentage of shares and borrowings 21.10 24.79
Group profit after tax for the year as a percentage of mean total assets 0.20 0.11
Group management expenses as a percentage of mean total assets 2.96 2.78
Society management expenses as a percentage of mean total assets 0.44 0.44
Gross capital represents the general reserve together
with the available-for-sale reserve, cash flow hedging
reserve, translation reserve, subordinated liabilities,
subscribed capital and non-controlling interests, as
shown in the Group Statement of Financial Position.
The gross capital ratio measures the proportion which
the Group’s capital bears to the Group’s liabilities to
holders of shares, depositors and other providers of
funds, that is, its investors.
Liquid assets represent the total of cash in hand
and balances with the Bank of England, loans and
advances to credit institutions and debt securities.
Liquid assets are generally readily realisable,
enabling the Group to meet its general liabilities
during the year.
The profit ratio measures the proportion that
the Group’s profit after tax for the year bears to the
average of the Group’s total assets during the year.
Mean total assets are calculated as the average
of the 2012 and 2011 total assets as shown in the
Group Statement of Financial Position. A reasonable
level of profit is required each year to maintain
the gross capital ratio at a suitable level to protect
investors’ funds.
The management expenses ratio measures the
proportion that the administrative expenses bear to
the average of the mean total assets during the year.
Independent
auditor’s statement
to the members and
depositors of Skipton
Building Society
We have examined the Summary Financial
Statement of Skipton Building Society for the year
ended 31 December 2012 set out on pages 24 to 28.
This auditor’s statement is made solely to the
Society’s members, as a body, and to the Society’s
depositors, as a body, in accordance with section
76 of the Building Societies Act 1986. Our work
has been undertaken so that we might state to
the Society’s members and depositors those
matters we are required to state to them in such
a statement and for no other purpose. To the
fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the
Society and the Society’s members as a body and
the Society’s depositors as a body, for our work, for
this statement, or for the opinions we have formed.
Respective responsibilities of
directors and auditor
The directors are responsible for preparing the
Summary Financial Statement, in accordance
with applicable United Kingdom law.
Our responsibility is to report to you our opinion
on the consistency of the Summary Financial
Statement with the full Annual Accounts, Annual
Business Statement and Directors’ Report and
its conformity with the relevant requirements of
section 76 of the Building Societies Act 1986 and
regulations made under it.
Basis of opinion
We conducted our work in accordance with
Bulletin 2008/3 ‘The auditor’s statement on
the summary financial statement in the United
Kingdom’ issued by the Auditing Practices Board.
Our report on the Group’s full Annual Accounts
describes the basis of our opinions on those
Annual Accounts, the Annual Business Statement
and Directors’ Report.
Opinion on summary financial
statement
In our opinion the Summary Financial Statement
is consistent with the full Annual Accounts,
the Annual Business Statement and Directors’
Report of Skipton Building Society for the year
ended 31 December 2012 and conforms with
the applicable requirements of section 76 of the
Building Societies Act 1986 and regulations made
under it.
John Ellacott
for and on behalf of KPMG Audit Plc,
Statutory Auditor
Chartered Accountants
Leeds
27 February 2013

Directors’
Remuneration Report
This report explains the Group’s policies for the
remuneration of Directors and discloses the
remuneration of Directors. The Board is committed
to best practice in its approach to remuneration
policy and this report explains how the Group
applies the principles in the Corporate Governance
Code relating to remuneration, insofar as they are
considered appropriate to building societies. A
summary of this report will be sent to all members
entitled to vote at this year’s Annual General
Meeting at which members will, once again, have
the opportunity to vote on the report.
Remuneration Committee
The Remuneration Committee is responsible for
determining, on behalf of the Board, the Group’s
remuneration policy, reviewing its adequacy,
effectiveness and compliance with the FSA’s
Remuneration Code (the Code). The Committee
specifically:
• Sets remuneration for the Chairman and the
Executive Directors.
• Approves the remuneration policy for senior
managers who have a material impact on the
Society’s risk profile (Code Staff).
• Reviews recommendations from the Group Chief
Executive for approval of the remuneration for
key executives in the Group.
• Agrees the design and overall targets for
any short or long term variable pay schemes
applicable to senior executives and Code Staff.
The Committee has established clear remuneration
principles which reflect both the requirements
of the Society and the Code. These principles,
which are reviewed annually, apply Group-wide,
setting appropriate standards with regard to
remuneration governance, risk management,
variable pay structures (and the link to
performance) and Code Staff remuneration. The
Committee receives an annual report from the Chief
Conduct Risk Officer and Secretary on the
implications of the remuneration policies within the
Group on risk management and compliance with
the principles.
The terms of reference of the Remuneration
Committee are available, on request, from the
Secretary.
The Remuneration Committee met 10 times during
2012. In discharging its duties, the Committee
reviews and takes into account independently
produced data in relation to similar financial
services organisations. Independent remuneration
consultants advising the Committee have no other
connection with the Group.
The Committee currently comprises three Non-
Executive Directors, Messrs Hutton (Chairman),
Thompson and East. The Chairman, Group Chief
Executive, Chief Conduct Risk Officer and Secretary
and Chief Human Resources Officer regularly
attend by invitation and external advisers are invited
to attend meetings as and when appropriate.
In addition to its annual responsibilities, the
Committee has been involved during 2012 in the
following areas:
• Review and approval of medium and long
term incentive schemes for Operational Board
members in group subsidiaries.
• Review of total remuneration for the Society’s
Executive team with particular emphasis on
balancing reward for short term objectives with
a long term focus on sustainable profit and
member value.
• Approval of design changes to the Society’s
Senior Leadership Team annual bonus scheme.
• Updating of Executive service contracts.
The Non-Executive Directors’ Remuneration
Committee, which comprises Messrs Ellis
(Chairman), Cutter and Twigg, determines the level
of the other Non-Executive Directors’ fees.
Remuneration policy
In establishing, implementing and maintaining
the remuneration policy, the Committee applies
the Group’s remuneration principles. The general
principles set out the Committee’s standards
with regard to remuneration, governance, risk
management, and the link to performance.
In addition to the general principles listed below,
the Committee sets out requirements for the
operation of variable pay, setting appropriate rules
and limits around bonus and incentive payments.
Further requirements on deferral and performance
adjustment apply specifically to Code Staff. The
principles were last reviewed in Q4 2012 to reflect
the FSA’s guidance consultation on the approach to
sales incentives.
General principles
1. A total rewards approach to remuneration is
taken which encompasses the key elements
deployed to attract, engage and retain
employees, namely: compensation (base and
variable), benefits and the ‘work experience’. The
‘work experience’ includes but is not restricted to
culture / environment, work / life balance, career
development and recognition.
2. Remuneration throughout the Skipton Group
encourages a high level of stewardship and
corporate governance.
3. Remuneration policies, procedures and practices
reflect sound, effective risk management and do
not encourage risk taking which falls outside any
of the stated Board Risk Appetites or the scope
of Board policies.
4. Remuneration practices are reviewed at least
annually by the Risk function to ensure they do
not encourage inappropriate risk taking behaviour
or present conflicts of interest which may result in
unfair outcomes for our customers.
5. Remuneration is to be competitive and sufficient
to secure and retain the services of talented
individuals from other companies or mutual
organisations with the key skills, knowledge
and expertise necessary to run group businesses
effectively, recognising the diverse nature of the
Group and the nature of its stakeholders.
6. Remuneration recognises the appropriate level
of business and individual performance which
will create a strong and sustainable Group for the
benefit of our members and customers, now and
in the future.
7. Where remuneration is performance related, it will
be based on the assessment of the individual
/ team, the business unit and overall Group
performance (if appropriate). In assessing
individual performance, a balance of financial and
non-financial criteria will be taken into account.
8. Remuneration arrangements are transparent,
consistent and fair, reflecting individual
responsibilities and performance. Base
compensation will reflect the core role and
responsibilities of the individual whereas variable
compensation will reflect the achievement of
agreed targets, or objectives which are over and
above business as usual activities.
9. All employees will be rewarded fairly, regardless
of race, colour, creed, ethnic or national origin,

marital status, disability, age, gender, gender
reassignment, sexual orientation, political
opinion, religion, trade union or non trade
union membership.
10. Remuneration arrangements are cost
effective and straightforward to understand,
communicate and administer.
Executive Directors’ remuneration
The Board’s policy is designed to ensure that
Executive Directors’ remuneration reflects
performance and enables the Group to attract, retain
and motivate a sufficient number of high calibre
individuals to lead and direct the organisation and
deliver continually improving business performance.
Our approach to Executive Directors’ remuneration
is as follows:
Basic salary – basic salary reflects the size of the
role and responsibilities, individual performance
(assessed annually) and the skills / experience of
the individual. The Society uses a recognised job
evaluation mechanism to determine the relative size
of roles.
In setting appropriate salary levels, the Committee
takes into account data for similar positions
in comparable organisations. The data is
independently commissioned and the Society
aims to position Executives competitively within this
reference group.
Annual Variable Pay – the Executive Directors
participate in the Senior Leadership Incentive
Scheme (the Incentive Scheme) which is a
non-pensionable performance incentive scheme
designed to reward the achievement of objectives
across a balance of financial and non financial
objectives. These are reviewed each year and set
by the Committee. In setting target and maximum
payments, the Committee considers both the
market position and the risk appetite of the Society
and sets these levels accordingly.
Currently, annual bonus under the Incentive
Scheme is the only variable pay element although
this is under review, with proposals for a Long Term
Scheme being considered for 2013.
Pensions – the Executive Directors receive
contributions payable into defined contribution
pension arrangements, or a cash equivalent.
Benefits – include the provision of a car or car
allowance and private medical insurance.

Non-Executive Directors
Fees
£000
2012
Committee
Fees
£000
Total
£000
Fees
£000
2011
Committee
Fees
£000
Total
£000
Mr M H Ellis (Chairman) (note 1)
155 - 155 94 - 94
Mr A I Findlay (resigned 24 May 2011) - - - 28 - 28
Mr C N Hutton (Vice Chairman)(note 2)
48 4 52 48 4 52
Ms M L Cassoni (note 3)
18 1 19 - - -
Mr R D East (note 4)
41 - 41 4 - 4
Mr P R Hales(note 5)
41 8 49 40 5 45
Ms A B E Kinney(note 6)
34 7 41 40 8 48
Mr G Picken(note 7)
41 - 41 - - -
Mr P J S Thompson 41 - 41 40 - 40
Mr W R Worsley (retired 3 May 2011) - - - 13 - 13
419 20 439 307 17 324
Notes
1. Mr Ellis was appointed Chairman on 24 May 2011, replacing Mr Findlay who resigned from the Board on the same date.
2. Mr Hutton is also Chairman of the Remuneration Committee.
3. Ms Cassoni was appointed a Director on 31 July 2012, and was appointed Chairman of the Audit Committee on 31
October 2012.
4. Mr East was appointed a Director on 29 November 2011.
5. Mr Hales is the Chairman of the Board Risk Committee.
6. Ms Kinney resigned as a Director and as Chairman of the Audit Committee on 31 October 2012.
7. Mr Picken was appointed a Director on 17 January 2012.
comparable data from similar financial services
organisations. Additional fees are paid to those Non-
Executive Directors who undertake additional duties
and responsibilities, including chairmanship of
Board committees.
Non-Executive Directors only receive fees and do
not participate in any performance pay scheme,
nor do they receive pension or other benefits. The
Non-Executive Remuneration Committee increased
the Non-Executive Directors’ basic annual fee
from £40,000 to £42,000 from 1 July 2012, the first
increase since July 2007.
The Chairman’s fees are reviewed and approved by
the Remuneration Committee. Mr Ellis’ fee was set
following comparison with market data at £155,000
per annum when he joined the Board as Chairman
on 24 May 2011, and has not been increased since.
Service contracts
The Executive Directors are employed on rolling
service contracts which can be terminated by
either the Society or the Director giving one year’s
notice. Unless notice to terminate is given by either
party, the contracts continue automatically. Non-
Executive Directors do not have service contracts.
2012 Executive Directors’ Remuneration
review
Basic salary
In 2011, following an external benchmarking survey
of executive remuneration in comparable financial
services organisations, the Committee agreed to
increase the basic salaries of the Group Chief
Executive and Group Finance Director to £352,000
and £275,000 respectively with effect from 1
April 2011. Mr Fleet’s basic salary, following his
appointment to the Board as Distribution Director
on 6 December 2011, was set at £230,000 and Mr
Cornelius’ basic salary, following his appointment
to the Board as Commercial Director on 11 June
2012, was set at £210,000 based on comparable
market data.
There has been no subsequent increase to the
Executive Directors’ basic salaries.
Variable pay
The Incentive Scheme was introduced in 2011
and therefore ended its first year of operation in
December 2011 with payment made in March 2012.
In reviewing the operation of the Incentive Scheme
for 2012, a number of changes were made in the
following areas:
•Profit – Group profit was retained as a
performance target but Society profit was
replaced with Mortgages and Savings profit to
reflect a broader focus. Individual profit targets
were removed from the Incentive Scheme
and reflected more appropriately in personal
objectives.
•Common Team KPIs were set for all participants,
taking into account a balance of conduct
prudential risk factors. The team KPIs reflect
people, customers, conduct, and financial
strength and process measures.
The Incentive Scheme is capped in line with market
practice and provides an appropriate balance
between base and variable pay. The Incentive
Scheme rules include the requirement to defer
over three years a portion of the amount earned
by any individual if the total amount earned by that
individual is greater than £500,000, or the amount
earned under the Incentive Scheme is more than
33% of his or her total remuneration.
The Remuneration Committee may reduce or
withdraw the payment of a deferred amount
in certain circumstances and has the power to
reduce or cancel payments due under the Incentive
Scheme if it believes in extreme circumstances
that the payments are not appropriate. In 2012, the
Committee exercised its discretion and reduced the
bonuses of Executive Committee members by 10%
as a result of conduct risk issues within the Financial
Advice division.
Under the terms of the Incentive Scheme and based
on the results of the business and their individual
performance, the Executive Directors are entitled
to the following annual performance payments
for 2012, expressed as a percentage of their basic
salary: Mr Cutter 51.4% (2011: 15.0%); Mr Twigg 45.8%
(2011: 10.1%); Mr Fleet 47.8% (2011: 17.5%) and Mr
Cornelius 50.4% (2011: not applicable).
Long term incentive plan
As part of the review of Executive remuneration, the
Committee has been considering the introduction
of a long term incentive plan for senior executives
in common with many other banking and financial
services organisations. This was supported by the
benchmarking exercise carried out during the
year which concluded that the total remuneration
of some Executives is below market largely (but
not exclusively) due to the absence of a long term
incentive plan. The Committee’s aim in introducing
a long term incentive plan is to:
•Align reward to the achievement of long term
sustainable profit and member interests.
•Provide an appropriate balance between short
and long term objectives in the reward package.
•Provide market competitive reward packages
which support retention and high performance of
key Executives.
The Society intends to implement such a
scheme during 2013. The scheme will apply to
approximately 13 senior executives. It is intended
that, over time, the balance between short and
long term incentives will become equal by
transferring variable pay from the short term
scheme into the long term scheme. This will ensure
an appropriate balance in the overall remuneration.
Non-Executive Directors’ remuneration
Non-Executive Directors’ fees (excluding those
of the Chairman) are reviewed annually by the
Non-Executive Remuneration Committee with
recommendations made to the Board. The
reviews are based on the responsibilities and
time commitments required for Board and Board
sub-committee meetings and also reflect
Directors’ emoluments

W
e’re always looking
for ways to
improve our service
and product range,
to help us provide
the best solutions for
you. To do this we use
a range of different tools
including our Customer Panel,
which comprises a group of people from
around the country who are invited to
give feedback and comment on topics
relating to the Society. This could be
anything from new product ranges to
the style of our marketing material.
We’recurrentlylookingformorecustomers
to join the panel and help us with our
research. Most of our research is
conducted online, with an average of
around eight to 10 email surveys for
each member over the course of a
year. However, you are also welcome
to join the panel to take part in postal,
telephone or face-to-face research, which
we carry out at least twice a year.
The great thing is we’ll only invite you to
take part in surveys we feel are relevant
to you and you can decide if you want to
answer or not, so you’ll never feel under
pressure. We will also keep you updated
on the panel and the outcome of research
through a quarterly email update or annual
newsletter.
Becoming a member is easy. To become
an online member simply visit skipton.
co.uk/joincustomerpanel and fill in the
short form. Alternatively, you can send your
details to Customer Panel, Customer
Insight, Skipton Building Society,
The Bailey, Skipton, BD23 1DN.
Please include your name,
address, date of birth, phone
number (if you are happy to be
contacted by phone) and email
address (if you are happy to be
contacted by email).
Over
2,800
customers have
already joined
the panel
Share
your views on
the things that
matter to
you
Become a member of our
Customer Panel
Please note you may, on occasion, be contacted by an external research company, on our behalf. Terms and
conditions apply, please see skipton.co.uk/joincustomerpanel for full details.
2012
Salary
£000
Annual
Performance
Pay
£000
Benefits(1)
£000
Sub
total
£000
Increase
in accrued
pension
£000
Pension
scheme
contributions
£000
Total
£000
Mr D J Cutter 352 181 16 549 4 70 623
Mr I D Cornelius (note 2)
123 62 7 192 - 10 202
Mr M R Fleet 230 110 26 366 - 18 384
Mr R J Twigg 275 126 12 413 4 55 472
980 479 61 1,520 8 153 1,681
2011
Salary
£000
Annual
Performance
Pay
£000
Benefits(1)
£000
Sub
total
£000
Increase
in accrued
pension
£000
Pension
scheme
contributions
£000
Total
£000
Mr D J Cutter 344 53 15 412 1 69 482
Mr M R Fleet (note 3)
16 2 2 20 - 1 21
Mr R J Twigg 269 28 12 309 1 54 364
629 83 29 741 2 124 867
Notes
1. Benefits comprise the provision of a car or car allowance, and private medical insurance contributions.
2. £72,000 (2011: £nil) of Mr Cutter’s annual performance pay was deferred under the rules of the scheme.
3. Mr Cornelius was appointed as an Executive Director on 11 June 2012 and the above table includes his remuneration,
annual performance pay and benefits as a Director of the Society from that date.
4. Mr Fleet was appointed as an Executive Director on 6 December 2011 and the above table includes his remuneration,
annual performance pay and benefits as a Director of the Society from that date.
Executive Directors

Prize Draw Terms Conditions
One entry per person. No purchase is necessary. Travel costs are not included in the prize. You will automatically be entered into the draw if you provide Skipton Building
Society (SBS) with your contact details on or before 31 May 2013. The draw will take place on 3 June 2013 and will be conducted by the Marketing Manager. The draw
is not open to persons aged under 18, or employees or agents of SBS and other companies in the SBS Group, their families or any other person connected with the
draw. The winner will be notified by telephone, email or post no later than 14 June 2013. The winner must contact SBS to confirm acceptance of the prize within 21 days
of notification. The winner will be notified how they can collect their prize. In the event of non-acceptance within the specified period, or if the person is not contactable,
SBS reserves the right to reallocate the prize awarded to the next randomly drawn valid entry. There is no cash or other alternative to the prize stated and the prize is
not transferable. No correspondence will be entered into. Winners may be required to submit valid identification before receiving their prize. SBS will not be liable for any
failure of receipt of entries, and takes no responsibility for any entries that are lost, delayed, illegible, corrupted, damaged, incomplete or otherwise invalid. SBS reserves
the right to substitute a prize of equal value in the event that circumstances beyond our control make this unavoidable. SBS expressly disclaims any and all warranties,
whether expressed or implied relating to the prize including any warranties as to the merchantability or satisfactory quality or fitness for a particular purpose. The name
and county of the winner will be available by sending a SAE to the address provided above after the draw date. By entering you will be deemed to have accepted these
terms and conditions and be bound by them. SBS will be the data controller responsible for the safe keeping of your data, which will be used for the administration
of the prize draw. Your data will also be used to provide details of selected products and services if you have indicated above that you are happy to be contacted.
To receive regular updates on the latest products and services, to be contacted about your
insurance needs when the time is right and for your chance to win, simply complete and return
the form below before 31 May 2013 and we will enter you into a free prize draw. Alternatively,
you can enter online at skipton.co.uk/portrait.
Email address
Title Forename Surname
Postcode
Skipton Building Society (SBS) would occasionally like to contact you with details of products, services and
other promotions which may be of interest to you. By providing your details, you are consenting to receive such
communications by email, unless you have indicated your objection by ticking this box.
Your renewal months
By providing the information below you consent to SBS using it to contact you about your insurance deal.
Car insurance renewal month Home insurance renewal month
You can return your complete entry form to any branch, or send it to:
Family Portrait Prize Draw, Skipton Building Society, Marketing Department, FREEPOST, Skipton, North Yorkshire, BD23 1YA
Skipton Building Society is a member of the Building Societies Association and the Financial Ombudsman Service. Authorised
and regulated by the Financial Services Authority under registration number 153706 for accepting deposits, advising on and
arranging mortgages and insurance. Skipton Financial Services Limited offers Restricted advice and is authorised and
regulated by the Financial Services Authority (FSA) under register number 100013 and is a wholly owned subsidiary of Skipton
Building Society. *To help maintain service and quality, some telephone calls may be recorded and monitored.
prize
Draw
Enter by
31 May 2013
Win one of four family and friends portrait
experiences – and capture your own memories
PRIZE DRAW ONLY OPEN FOR THOSE AGED 18 OR OVER. Office use only A/C
MY BUILDING SOCIETY
Principal Office, The Bailey,
Skipton, North Yorkshire BD23 1DN
Telephone: 0845 850 1700*
skipton.co.uk
Package includes:
• A one hour group photography session with a
national portrait company;
• A viewing appointment showcasing the images
from your session;
• One 8”x6” framed portrait of your choice;
• £100 voucher to spend on another framed
portrait or photography session;
• Supplier’s own terms and conditions will apply.
We can provide documents in large print, Braille or audio cassette
or CD if you need them. Please speak to a member of our team on
0845 850 1733 to find out more.

My Skipton AGM Mag 2013

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