Run for the benefit of members not external shareholders, Building Societies offer the best of banking – without being a bank
The main thing that sets building societies apart from banks is that they are mutual. Where traditional banks are more geared towards profit for themselves and external shareholders – who may not be customers of the bank and may not have its long-term interests at heart – building societies are run in the interest of their members. Pretty much anyone who has an account at a building society can be a member, giving them the right to be part of the running of the institution by voting for directors, attending meetings, and even influencing investment decisions.
Building Societies that converted to banks in the wave of demutualisation saw their running costs rise by 35% on average – costs that are borne by the bank’s customers. And mutuality brings many more advantages than that: building societies punch well above their weight when it comes to providing investment to the real economy, and frequently top customer satisfaction surveys too.
In fact, building societies as a group scored better in almost every category on the Move Your Money scorecard than banks did as a whole, with three building societies being amongst the top 5 scoring current account providers on our Scorecard (Cumberland, Coventry and Leeds).
Whether you’re interested in great customer service, honesty and transparency, good banking culture, ethics, or their impact on the real economy, there’s almost certainly a building society for you in the UK.
Below, we highlight some of the stand-out building societies in the sector, though it’s worth noting that there are many more out there. Joining your local building society can be an excellent way of involving yourself in investment decisions that affect your local economy, whilst also getting market-leading returns and an excellent service. It’s also worth noting that while some building society accounts are only open to people within the local area, many now offer services across the UK.