Before the 1980s’ and 1990s’ privatisation frenzies, there were hundreds of British building societies, many of which were local. If you lived in a reasonable-sized town you could apply for an account with a building society based in and dedicated to your home town.
These days their numbers have fallen, with many of the bigger societies privatised, operating just like the big banks with shareholders’ needs driving the show.
If you’d like to shift your hard-earned money to a financial institution that hasn’t been involved in some kind of scandal or other, ‘mutuals’ are, by all accounts, still a good bet. And they’re well known for offering very good value for money.
The Building Societies Association (BSA) represents a collection of ‘mutual’ lenders and deposit takers in the UK, including all 46 remaining British building societies.
What’s the difference between a mutual and a privatised bank? Mutuals are owned by their customers. Their ‘customers’ are anyone who banks with them, either saving or borrowing or using them just like a regular bank account. There are no shareholders so they’re not put under external shareholder pressure. As such they operate in the interests of their members – the people who bank there – and the communities they serve.
As the BSA site says, “Mutuals consistently provide better service and higher customer satisfaction than other financial service providers. They outperform plc banks across various aspects of customer service, including treating customers fairly, value for money and being trusted to give good advice.”
Why don’t more people move their bank accounts to mutual organisations? Simply because of inertia. Once all your direct debits and standing orders go through your bank account, your pay goes in there and you have a clutch of credit and debit cards, it feels too much like hard work to move. But it’s actually pretty simple and many mutuals provide support with switching. Some will even handle the paperwork for you.