Savers with the Birmingham Midshires can expect a payment of around £1,250 if the merger with the Halifax is voted through in December.

The Halifax offered £750m in March to take over the UK's fourth largest building society, beating the Royal Bank of Scotland which had offered £630m.

Midshires Chief Executive Ian Kerr said the building society intended to distribute the windfall payments as widely as possible, while rewarding customer loyalty.

Savers gain most

Under the plan, long-term savers with the building society - an estimated 400,000 members - will receive an average £1,250.

The minimum payment to savers of two years standing will be arond £800, and the maximum could be as high as £5,400.

Borrowers with the society, and savers of under two years, will only receive preference shares in the Halifax, worth around £400. These shares pay out fixed income dividends.

For the first time, children will benefit from a building society conversion and trustee account holders for elderly, ill and disabled people, and heirs of members who die before they receive any payment will also qualify.

The payments, and the formal merger if approved, will take place in April.

It may well be the last building society windfall for some time.

Last summer, the largest remaining building society, the Nationwide Building Society, narrowly rejected demutualisation and said it would not vote again for two years.