Page 2: What is a friendly society?
Prior to the establishment of the Welfare State in 1948, the only way ordinary voting people could provide protection for themselves against misfortune such as illness, accident or death, was by joining a friendly society. The friendly society movement actually dates back to the sixteenth century and today there are over 300 friendly societies in the UK representing the interests of over six million members. Nowadays, however, they tend to specialise in the provision of tax-free savings and protection policies.
Prior to the launch of the Children’s Ethical Trust, Family Assurance Friendly Society had offered a number of investment opportunities for families and young people such as:
- The Family Bond. This provides a unique opportunity for families to save money, tax free, for a ten year period. The tax free nature of the Bond means that the Government restricts the amount which may be saved to a maximum of £25 per month (there is also a lower premium of £15) or the annual equivalent, if preferred. Premiums are therefore affordable to most people.
- The Junior Bond. The tax free Junior Bond is Family Assurance’s best selling children’s saving plan. Like the Family Bond, there is a minimum investment term of 10 years. However, investors can set savings aside for a longer period if they choose, perhaps to coincide with the young person’s 18th, 21st or 25th birthday. This provides a unique opportunity for parents and relations to save for special milestones such as continuing education, getting a car or even a first home. It is an affordable investment with premiums of £10, £15 or £25 a month or the annual equivalent.
New product development
Organisations must carry out a lot of detailed research before adding to their product portfolio. Family Assurance therefore engaged in research before making the decision to move into ‘ethical investment.’ A detailed analysis of their database giving extensive statistical information about the Society’s members and their lifestyles already existed. This was supported by further investigative research into existing members’ views of the organisation e.g. their expectations of Family Assurance and their concerns about savings and investments. The research enabled Family Assurance to build up a detailed picture of their customers’ attitudes.