THE UK’s biggest building society said yesterday that profits had been squeezed by bad debts and a hefty bill under the Government’s savings protection scheme.

Nationwide’s pre-tax profits for the year to April 4, were down 69 per cent at £212m as provisions for bad debts rose sharply to £394m.

Margins have also been impacted by record low interest rates.

The building society also took a £241m hit from its levy paid into the Treasury’s Financial Services Compensation Scheme.

A spokesman for Nationwide said that this system was ‘‘illogical and unfair’’ because it was being punished by being given a bigger bill to reflect its larger share of the savings market – despite the fact it is a lower-risk business.