In 1869, the Building Societies Association was set up to represent the industry. Building societies are mutual organisations which date back almost 250 years and were initially set up to help people to build their own houses. Today, their main business is to accept deposits and lend funds to those wanting to buy their own home.
The impact of the recent financial crisis and the banking decisions that sparked it, have prompted calls for banks to go 'back to basics'. In other words, to be less profit orientated and focus on a model which puts customers, not shareholders, first but without lending limitless amounts of money unnecessarily. (The Times, 6 March 2009).
Although some building societies have cut savings rates more aggressively than the banks in the recent economic downturn, savers appear to have concluded that mutuals are a safer option for investments. This is suggested with more than a million building society accounts opening in the past 12 months (The Times, 6 March 2009).
However, are the deals offered by building societies any better than those from the banks? Various Money's best-buy tables show a good choice of accounts offered by building societies. A recent survey of savings accounts by Moneyfacts.co.uk (the financial data provider) said 79% of the most consistent deals were from building societies. Customers are now considering other factors besides the savings rate itself with mutuals scoring higher than banks in terms of customer satisfaction (The Times, 6 March 2009).
See the Times 100 case study on the Building Societies Association to understand how building societies differ from banks.