Building Societies Association
What's the difference between a building society and a bank?
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A building society is a mutual institution. This means that most people who have a savings account, or mortgage, are members and have certain rights to vote and receive information, as well as to attend and speak at meetings. Each member has one vote, regardless of how much money they have invested or borrowed or how many accounts they may have. Each building society has a board of directors who run the society and who are responsible for setting its strategy.
Building societies are different from banks, which are companies (normally listed on the stock market) and are therefore owned by, and run for, their shareholders. Societies, which are not companies, are not driven by external shareholder pressure to maximise profits to pay away as dividends. This normally enables them to run on lower costs and offer cheaper mortgages, better rates of interest on savings and better levels of service than their competitors. Follow the link below for the BSA's recent report on customer service.
The other major difference between building societies and banks is that there is a limit on the proportion of their funds that building societies can raise from the wholesale money markets. A building society may not raise more than 50% of its funds from the wholesale markets. The average proportion of funds raised by building societies from the wholesale markets is 30%.
Further information
View a full list of building societies
View a full list of former building societies that have converted to banks
BSA Report: Building societies: providing a better customer service
