Customer-owned building societies and credit unions are delivering better products, fairer rates and stronger service than the banks by prioritising members over profit, according to the Building Societies Association (BSA), which is marking 250 years since the creation of the UK’s first building society.
In a statement championing the unique culture and member-first structure of mutuals, the BSA said: “Building societies’ reason for existing is fundamentally the same as it was when the first building society was set up 250 years ago – to provide a place for people’s savings and to use these to help ordinary working people to buy a home of their own.”
Unlike banks, building societies have no external shareholders. Instead, they are owned by their 25 million customers, who become members automatically when they open a savings account or take out a mortgage. While banks must focus on maximising profit for shareholders, building societies reinvest surplus profits into the business, their customers, and local communities.
New BSA figures show that mutuals provided 89% of the growth in the mortgage market in the nine months to September 2024. Over the past five years, they’ve supported 496,760 first-time buyers into homeownership – reflecting their historic role in helping people overcome affordability challenges.
Building societies also outperform banks in savings. In the same five-year period, savers received an extra £5.4bn in interest than if they had been paid average bank rates. By September 2024, building societies had attracted £20.7bn in cash savings – accounting for 34% of UK savings growth.
Robin Fieth, chief executive of the BSA, said: “Building societies have never lost sight of their purpose to help their members to save and to become homeowners.
“Their business model doesn’t rely on profit maximisation to line the pockets of external shareholders, it prioritises the needs of their customers, the members, and delivers value to them and their communities. At 250 years old, you could say they are the original B Corp!
“I am proud that the way customer-owned building societies and credit unions do business is different to the banks. We are the original money movement, set up by ordinary working people, for ordinary working people and to help local communities to thrive.
“Anyone who is looking for a new mortgage or savings account, I’d recommend consciously thinking about who you choose to do business with. You could find an organisation that genuinely cares about their customers, who treats them as an individual, and keeps them at the heart of every decision they make.”
Building societies are also playing an active role in community investment, employee volunteering, and branch retention. They now provide 30% of UK high street branches – up from 20% five years ago – while many banks have exited town centres. Some mutuals have even pledged to keep branches open and are trialling new formats to support in-person customer access.
A recent survey showed 72% of building society customers see their provider as an important part of their community, compared to just 54% of bank customers.
