Consumers
What Others Say
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Building societies generally offer a better deal to the consumer because they do not have to pay dividends to shareholders. Accordingly they are able to offer lower mortgage rates and higher savings rates to their customers than other institutions. This is not just the view of the BSA and building societies, but of a number of external commentators - regulators, journalists, MPs, analysts, academics and others - as the following selection of comments shows.
- The financial crisis of late 2008 - in which some plcs were brought low by greed and colossal misjudgements - highlighted the virtues of the mutual model. Yorkshire Post,
9 March 2010
- Mutuals offer the model for better banks. Headline, Mail on Sunday
7 March 2010
- Why does Lloyds TSB have 51% of complaints upheld [by the Financial Ombudsman Service], HSBC 57% and Barclays 65%? Against this Nationwide Building Society has 31% upheld, and Yorkshire 19%. This implies that building societies really do treat their customers better. Tony Hazell, Personal Finance Editor
Daily Mail, writing in Financial Adviser
4 March 2010
- There is a case for a more varied banking ecology. Those mutuals which resisted the - disastrous - lure of conversion continue to provide a different and, for many, more attractive business model without the pressures to produce shareholder returns.
Vince Cable, Liberal Democrat Shadow Chancellor, setting out the Liberal Democrat plan for the banking sector.
23 February 2010
- Britain needs building societies not only to survive but to prosper.
Nick Goodway, The Evening Standard
18 February 2010
- Building societies have been forced to compete with one hand tied behind their backs. Not only are the state-backed banks squeezing them in the savings market, but they face a significant increase in the Financial Services Compensation Scheme levy - to compensate savers in failed banks - and the regulator is forcing mutuals to boost their capital adequacy levels.
Jeff Salway, Personal Finance Editor, The Scotsman
18 February 2010
- The demutualisation of the building societies symbolised the very attitude - the prioritisation of short-term gains over long-term consequences - that caused the banking crisis.
Tessa Jowell MP, Minister for the Cabinet Office, the Olympics and London, writing on the Progress website
1 February 2010
- We want all arms of Government - in Scotland and elsewhere - to promote not just mutuality but greater diversity, so that there is not over concentration in one or two large institutions. Rob MacGregor, National (UK) Officer for Finance, Unite the Union
Evidence to The Scottish Parliament's Economy, Energy and Tourism Committee
27 January 2010
- The mutual sector is seen as having weathered the storm better than many in the banking industry.
David Prosser, The Independent
25 January 2010 - Smaller building societies are regularly offering best-buy [mortgage] deals.
Sunday Times 17 January 2010
- Building societies have once again dominated the first Moneyfacts consistency survey of 2010, with 72.5% of all accounts listed as performing consistently.
Louise Holmes, spokesperson at Moneyfacts.co.uk commented: "Despite a slight drop from 77% reported last October, our results show, yet again, that building societies still reign supreme in the consistency stakes."
Moneyfacts press release,
19 January 2010
- Are building societies inherently safer than their banking rivals? In short, the answer is yes: there are more restrictions on their activities, which prevents them moving up the risk/return line, and no pressure from shareholders to indulge in more risky behaviour in order to drive up gearing. There have, of course, been notable failures in the building society sector, but by and large it is an industry that has escaped the worst of the financial crisis.
David Prosser, The Independent
12 January 2010
- Mutuals suffered in the credit crunch, but nothing like as much as the banks did; big players like Nationwide sailed right through it. Northern Rock could quite easily be turned back into a mutual.....If Lloyds is forced to dispose of Cheltenham & Gloucester, why not turn that back into a mutual as well? Or the Halifax, that ended up as no more than the H in HBOS?
Matthew Lynn
Associate Editor, Spectator Business, and a columnist for Bloomberg
Spectator Business January 2010
- Nearly two-thirds of those surveyed this year said they mistrusted the financial services industry, with almost three-quarters saying that they are concerned that these businesses put shareholders’ interests ahead of those of policyholders.
By contrast, 69% said that they were more attracted to companies run by their customers.
In banking, where trust has been severely hit, co-operative banks, mutual institutions and building societies stand out as ethical, values-led businesses, behaving responsibly in an industry where too many have not.
Speech by Tessa Jowell MP
Minister for the Cabinet Office and the Olympics
15 December 2009
- On the whole, building societies have survived because they have stuck to their core functions and resisted the temptation to diversify into lucrative but risky activities.
The Scotsman
19 November 2009 - A strong building society sector is vital for consumers. Building societies provide competition for the banks but, more than this, offer essential local services often where banks do not deign to tread.
Daily Mail
18 November 2009
- Building societies have continued their dominance of the Moneyfacts Consistency Survey, accounting for almost four in five of the best deals in the savings market. Figures from the research have revealed that some 77 per cent of the most consistent savings accounts are offered by building societies.
Moneyfacts press release
22 October 2009
- The clock cannot be turned back, but there was no compelling business argument for conversion. … There is no case for subsidy or artifical protection of mutual or not-for-profit institutions. But there is a strong argument for establishing a legal framework that would prevent the realisation of the assets and goodwill of businesses for the benefit of a single generation of customers. Mutuals would then compete with profit-making companies on the merits of their alternative business models, and would not be destabilised by extraneous factors.
Narrow Banking, by John Kay (former director of Halifax Building Society)
Published by the Centre for the Study of Financial Innovation
September 2009
- I am happy to say that reports of the death of the building society sector are greatly exaggerated. Indeed, mutuality may do a better job of aligning stakeholder incentives than some alternative forms of corporate governance. It is a depressing but telling fact that, of the demutualised former UK building societies, none is today in independent ownership. Thrift, mutuality and relationship-building have long underpinned banking in Yorkshire. These principles went missing in the run-up to the present crisis. The
costs of that vanishing act are now all too apparent. In rebuilding the financial system, to create one which is both stable and better able to meet the needs of the real
economy, these principles need to be rediscovered. They offer a tried and tested – indeed, trusted – roadmap for the period ahead.
Andrew Haldane Executive Director, Financial Stability, Bank of England speaking to the Association of Corporate Treasurers, Leeds
14 September 2009
- “The selling of payment protection insurance with personal loans has led to excessive premiums and the exploitation of customers.”
The claim is made in a report published by the Economic and Social Research Council (ESRC) Centre for Competition Policy, based on research by the University of East Anglia and Newcastle University.
The study, which used data from Moneyfacts, found that over the period January 1998 to December 2007, lenders cross-subsidised the cost of personal loans by offering over-priced payment protection insurance (PPI).
Banks were the worst offenders, typically charging “significantly more” than mutually owned building societies.
Banking Times
10 September 2009
- The mutual sector has not been immune to the pressures caused by the contraction of global credit markets and the crisis that has ensued, particularly for those firms diversifying into new and high risk lending products; it is the Government's view, however, that the traditional mutual model has, on the whole, stood up well.
Reforming Financial Markets White Paper, HM Treasury
July 2009
- Two years ago, when Moneyfacts.co.uk started to monitor the most consistent savings accounts, building societies came out on top, taking 72% of the top places.
Despite the turbulent economic conditions that the last two years has brought, the building societies have continued to increase their dominance for consistent paying savings account, today taking 83% of the top places.
Louis Kaszczak, Head of Moneyfacts.co.uk commented:
"Building societies continue to increase their dominance of the savings market, with mutuals continuing to play fair with their members, offering the most consistent rates of return.
The lack of presence of high street banks shows that savers need to look further afield to find the most attractive home for their money.
Moneyfacts press release
16 July 2009
- Although building societies, like banks, have been weakened by adverse economic and financial market conditions, the extent of that weakening has to date been less than that experienced by the banks mainly because of the lower exposure to wholesale funding and complex financial instruments.
A Specialist Sourcebook for Building Societies: Enhanced Supervisory Guidance on Financial and Credit Risk Management, CP09/17, FSA
June 2009
- "[Building Society] members enjoy much more competitive savings rates than those on offer from banks. Currently 65pc of the Moneyfacts savings best buys are provided by building societies. On top of this, the deals that they offer tend to come with less restrictions than those from the banks. They don't require you to place additional money in other investment products to secure the top rate, nor do they make up large portions of the rates with a bonus. Additionally, the best rates carry a healthy shelf like. In a recent Moneyfacts consistency survey, building societies took 77pc of the places available, with Bath BS and Principality BS being the most consistent provider."
The Daily Telegraph
13 June 2009
- Building societies once again reign supreme, taking 77% of the top spots in the Moneyfacts consistency survey.
Taking more than three quarters of the top spots, building societies once again increase their dominance in the Moneyfacts consistency survey. Savers looking to make the most of their money shouldn’t just look to their bank for their savings needs.
Moneyfacts press release
15 April 2009
- I'd admit to having some sympathy for the building societies. Society business models have always been based on old-fashioned values, with the money deposited by customers used as a basis to lend to customers. They are paying for the banks' greed, in terms of higher levies to the Financial Services Compensation Scheme and in the lack of money in the pot to lend. But sympathy for the banks is misplaced. It was there idea (not to mention greed)) to invest in toxic debt, despite the risks. Their actions have left millions of shareholders out of pocket and helped trigger a financial crisis that has left savings rates close to zero.
Paul Farrow, Daily Telegraph
22 March 2009
- When it comes to finding a home for your savings, it is usually the smaller players such as building societies that offer the most competitive repository for your money.
Daily Telegraph
14 March 2009
- Mutuals have withstood the impact of the credit crunch much better than the listed banks.
Financial Times
31 March 2009
- The rest of the building society sector is in pretty good shape. Barring an economic disaster, no other substantial building society is expected to need rescuing in this way. So it remains the case that the UK's building societies have weathered the recession better than our commercial banks.
Robert Peston's blog, BBC website, following the decision to transfer the bulk of the assets and liabilities of the Dunfermline Building Society to the Nationwide Building Society.
30 March 2009
- The sort of professionals I would want to make more use of are those in the building society sector. They were never caught up in the frenzy of irresponsible lending. Larger societies in particular have had a pretty good record, so I would hope their top people would be available to give advice.
Vince Cable MP in Mortgage Strategy
16 March 2009
- When looking for a new home for your savings, it is easy just to consider high street names. However, the vast majority of the best deals on offer are from building societies.
Telegraph.co.uk
10 March 2009
- "If ever there was time for an expanded mutual sector, it's now. We desperately need to restore faith in financial services in this country."
John McFall. MP
Chairman, Treasury Select Committee
Quoted in The Observer, 8 February 2009
- Society business models are based on old-fashioned values, with the money deposited by customers used as a basis to lend to customers, unlike the banks that have borrowed money in the wholesale markets to lend to customers.
Daily Telegraph
7 February 2009
- Building societies are frequently at the top of the best buy tables. Look at the top five most consistent cash ISAs over three years: they are from mutuals such as Tipton & Coseley and Monmouthshire. You won't find too many (if any) high street banks topping the savings tables on a regular basis - many of the cheapest home loans continue to be offered by the societies.
Daily Telegraph
7 February 2009
- Building societies might be able to do even more for their savers if they weren't having to help foot the bill for the irresponsible behaviour of banks. The bills are still coming in for the bailout of Bradford & Bingley, Icesave and Kaupthing Edge - and anger is rising among building society members.
Tony Hazell, Personal Finance Editor, Daily Mail
17 December 2008 - Two building society bosses have finally brought some sense to the world of savings by refusing to bow to blustering Government ministers' demands for further massive mortgage rate cuts.
Tony Hazell, Personal Finance Editor, Daily Mail
17 December 2008 - As a Director of Halifax Building Society I was part of the decision to convert to a public limited company.....With hindsight, that was a mistake that damaged a fine business.
John Kay, Financial Times
17 December 2008
- Nobody will be calling for its [Nationwide's] demutualisation within the next couple of decades.
Neil Simpson, Spectator Business
December 2008
- One of the less publicised virtues of building societies is staying in touch with their members, who are also their customers. This is something banks are not good at, rarely encouraging face-to-face meetings with customers unless they want to sell products.
However, the chief executives of Norwich & Peterborough, Yorkshire and about a dozen other societies regularly tour the country to hold meetings near their branches.
Banks would doubtless dismiss such gestures as a waste of shareholders’ money.....
The Sunday Times
9 November 2008 - As we wrestle with continuing market paralysis more radicalism will be needed......We will need more institutions like mutually-owned building societies that incorporate non-capitalist principles.
Robin Blackburn, Professor of Sociology, University of Essex - I agree that some quasi-market institutions, such as building societies..... should be protected and fostered to provide a healthy ecological diversity for any financial system.
Anatole Kaletsky, economic commentator, and writer for The Times
Extract from a debate in Prospect
November 2008
- While savers are in a state of confusion, Mutuals reign supreme on consistency.
Building societies have again increased their domination of the consistency charts, appearing 36 times out of a possible 48 (75%).
Moneyfacts survey of consistently best-paying savings accounts
3 October 2008
- Building societies should never have gone public. All the building societies that transformed themselves into banks quoted on the stock exchange between 1989, starting with the old Abbey National, and 2000, when Bradford & Bingley took the plunge have either failed or had to be rescued. Following Bradford & Bingley's demise there is not one left.
Andreas Whittam Smith
The Independent
29 September 2008
- Anyone who has their cash in a building society rather than a bank knows their institution won't collapse because of stock market speculation....the key difference between a bank and a building society is banks are driven to greater profits and riskier deals by greedy shareholders. Building societies are owned by their customers.
The People
28 September 2008
- Turning into banks led to ruins
Headline in the Guardian on the demutualisation of building societies
29 September 2008
- It is fair to say that demutualisation has not served customers very well. By demutualising, the former building societies diversified away from their traditional business model and ended up relying on the wholesale market, which is what has got them into trouble.
Ray Boulger, of mortgage adviser John Charcol
Quoted in Daily Telegraph
29 September 2008
- The nationalisation [of Bradford & Bingley] will be seen as proof that the demutualisation of building societies - which began when Abbey National became a bank in 1989 - has been a colossal failure for both the former building societies and the British economy.
These specialist mortgage lenders were under such pressure to grow their profits, as public companies, that they became reckless adventurers in wholesale funding markets.
They raised too much money too cheaply on the global money markets, which they then lent too cheaply to British homebuyers.
Which then stoked up the housing bubble. And the popping of that bubble has done for them.
Every single demutualised building society has either collapsed and had to be rescued or has been swallowed up by a bigger bank.
The conversion of building societies into banks is an instance where deregulation and the liberalisation of an industry appears to have been an unmitigated disaster.
The Nationwide, which refused to follow the trend, looks smart.
Robert Peston Blog, BBC Website, 28 September 2008
- The wreckage of the Halifax and the Northern Rock over the last 12 months is the culmination of a process that has been underway since the insitutions decided to abandon their status as building societies and become banks listed on the stock exchange. Both thought they were ditching the restrictive past for an exciting, ambitious future, where the demands of rich shareholders would take priority over the need of their customers.
But in this eager determination to become the big boys of the City they ignored the long-held virtues of the building society movement, which, in a typically British way, have managed to combine the imperative of market capitalisation with the impulse to help the community.
Daily Express
19 August 2008
- The majority of best-buy accounts come from building societies, according to research out this week. A survey by Investec Private Bank found that of 61 accounts which appeared in the best-buy tables on the comparison site Moneyfacts between 25 April 2007 and 9 July this year, 40 of these were from building societies.
Daily Telegraph
16 August 2008
- The remaining building societies, meanwhile, may have gone through years in which they wondered whether they were being left behind, but their prudence has won the day in the end. [ ] Of course, their members haven't enjoyed the same excitement as bank investors, but somehow I doubt they feel they've missed out.
The Independent
22 August 2008
- Waiting for the early return of a securitised mortgage market to fund overvalued properties is, as Sir James Crosby recognises, to live in cloud cuckoo land. Banks need to rejoin the real world and return to a business model that attracts funds by paying higher rates and lends on sensible risk-based criteria. In essence, a building society model.
Letter published in the Financial Times
4 August 2008
- Building societies tend to offer consistently good savings rates.
Andrew Hagger - moneynet.co.uk quoted in the Sunday Express
3 August 2008
- The former societies are now banks and are driven by profits and shareholder returns. Building societies are owned by their members and are governed by their own Act of Parliament. This restricts their exposure to the wholesale money markets where many of the difficulties for the banks arose. In short, Northern Rock borrowed much of its money from other businesses - which means when the credit crunch hit, it struggled. Building societies have avoided the problem because most of the money they lend comes from their own savers.
Sunday Express
3 August 2008 - Building societies are counting the cash as savers flock to them for refuge from the credit crunch. In the first half of 2008, nearly £6.3bn of customer money flowed into savings accounts at the UK's 59 building societies. This compares with just £3.8bn for the same period last year - before Northern Rock crisis and the credit crunch hit home.
Independent on Sunday
3 August 2008
- Overall, it seems that loyalty with a building society is a two-way process. Stick with them and they will generally play fair with you. If you deal with banks, you are on your own. You might earn more interest and get a better deal in the short-term, but watch out because somewhere along the line they will get you and make a stack of money from your savings. They do, after all, have shareholders to pay - unless, that is, the Government has nationalised them.
Tony Hazell, Personal Finance Editor, Daily Mail
23 July 2008 - The daddy of all lost asset reclaiming systems is mylostaccount.org.uk.
The News of the World
13 July 2008
- Building societies offer safe haven for savers.
Headline, Daily Express
9 July 2008
- Some of the most battered banks are former building societies. Northern Rock, of course, is the most egregious casualty. But this week HBOS, formerly the mighty Halifax Building Society, is taking the humiliating step of asking its army of small shareholders for £4 billion in new capital. Bradford & Bingley, Britain's biggest buy-to-let lender, is the laughing stock of the City after its own botched attempt at raising money. Alliance & Leicester, its shares languishing at one fifth of the level of 18 months ago, is being kicked out of the FTSE 100, the club of the blue chip companies.
The Times
16 June 2008
- The best argument for mutuality is blindingly simple - a building society is owned by its savers and borrowers, so its sole purpose is to serve them. That goal is not complicated by a conflicting need to satisfy the Square Mile.
The Observer
8 June 2008
- If you just want competitive savings rates, good personal service and a range of home loans from a prudent business that's well equipped to ride out global market shocks, building societies remain a solid bet.
The Scotsman
7 June 2008
- In fact, the governance arrangements of building societies have proved rather sounder than those of the heavily "incentivised" bankers. Building society managements may be stuffy and old-fashioned, but at least they don't go blowing their capital on CDOs and hare-brained acquisition-making.
Independent
7 June 2008
- Building societies have offered more best-buy savings accounts than banks, and have also had two-thirds of the most consistent top-paying accounts, according to research by Investec Private Bank...........Rachel Thrussell, head of savings at Moneyfacts, the rate monitor, said societies' consistency was also more broadly based. "While they may not always pay market leading returns, they give consistently decent rates across all their products." Smaller, regional societies were particularly reliable, she added. By contrast, banks might have "a couple of really good rates" along with many much poorer deals.
Financial Times
2 June 2008
- Moneyfacts....tracks the most consistent accounts that are still open to new savers, based on interest paid over the previous three years. Moneyfacts says it has seen increasing online traffic from savers "fed up" with accounts losing competitiveness and who "don't want to keep moving their money". The results show that building societies "tended to play fairer than banks".
Financial Times
17 May 2008
- Meanwhile, with B&B floundering, the wave of building society demutualisations a decade ago (Halifax, Northern Rock, Alliance & Leicester et al) looks even more unfortuante. Not so much a triumph of popular capitalism as a disastrous exercise in value destruction.
The Times
15 May 2008 -
Building Societies have suffered less than banks from the turmoil in credit markets, because they raise more of their funding from savings accounts rather then on the wholesale markets
The Independent
9 May 2008 -
Overall, Nationwide and its fellow 58 building societies have been beneficiaries of the credit squeeze. They have seen large inflows of savings and new mortgage business since the crisis started in August.
Financial Times
5 May 2008 -
If you have a local building society in your area, as opposed to a branch of one of the giants, I would open an account there fast. The credit crunch is revealing the true colours of the lending fraternity and it isn’t a pretty sight. The banks ... ... and the government are openly shirking their public duty to provide affordable finance for people of modest means to buy a home. Some, including the nationalised Northern Rock, have adopted a "take it or leave it" attitude by cranking up mortgage interest rates to deterrent levels. Now First Direct, HSBC’s telephone banking arm, has pulled the plug completely, bleating that this is only a temporary measure. Temporary, that is, until it feels like opening for business again, never mind the customers. Building societies .............. are a better prospect. Mform.co.uk, the online mortgage introducer, says that the Yorkshire, Furness, Chorley and West Bromwich have been the best-value lenders this year. However ............... many are devoting their funds to their immediate communities. So stroll round and open an account. Maybe the global credit crunch will help revive these long-neglected lenders. Their savings rates aren’t bad, either.
The Sunday Times
6 April 2008 -
One satisfied [mutual] customer is Paul Giangrande, a haematology consultant.
He says: "There are no shareholders to pay and no fat cats to be paid out of the money that I'm paying in. It is essentially a democratic organisation in which members have a say. There are no tricky shareholder groups trying to exert pressure. I can get better rates and better treatment."
The Times
5 April 2008 -
Mutuals have also outperformed public companies with their no-frills savings products. Moneyfacts, the financial comparison website, trawled savings, mortgage, loan and credit-card offers to find the organisations that provide consistently market-leading rates. Building societies dominate the consistency tables for general savings accounts, cash ISAs and standard variable mortgage rates (SVRs). For no-notice savings accounts, four of the five top providers over 18 months were building societies. The three most consistent providers over 36 months were also building societies. Three of the top four most consistent providers of internet-based savings providers over 36 months were - yes, you've guessed it - building societies. They also dominated the tables for ISAs and for SVR mortgages.
The Times
5 April 2008 -
Business is booming for building societies after the Northern Rock debacle, with customers seeking alternatives to the banks that they believe are taking too many risks with their hard-earned cash. Figures from the Building Societies Association (BSA) showed a huge inflow of savings in the last four months of last year, particularly September and October, most of which could be attributed to the Northern Rock crisis. The total inflow for the year was £16.1 billion - approximately twice the level recorded in the previous year and a record for building societies.
The Times
5 April 2008 - Nationwide has gone from strength to strength... [and] ... small societies are well positioned. Most are streamlined, innovative and able to respond to market changes quickly with new deals and market leading-rates.
Mark Harris, Managing Director
Savills Private Finance
18 March 2008 - If the recent crunch proves anything, it must be the benefits of mutuality. Not to the exclusion of all else, but as a valuable part of the financial ecosystem.
The Independent
1 March 2008 - Smaller building societies that never went down the route of wholesale funding, instead financing their mortgages from savings deposits, have emerged almost completely unscathed by the credit crunch. Indeed, many enjoyed a huge windfall when billions of pounds in savings left Northern Rock in the second half of 2007.
The Guardian
26 February 2008 - Smaller building societies which have always financed their mortgages from deposits have emerged almost unscathed by the credit crunch.
The Guardian
25 February 2008
- Most building societies have taken "treating customers fairly" in their stride, claiming with justification that they put customers first irrespective of whether they are long-standing or newish.
Jeff Prestridge
The Mail on Sunday
10 February 2008 - Building societies offered the best value on mortgages in 2007. According to the Mform.co.uk, whose research ranked best buy products based on the true cost including all fees across the year, building societies scooped all top ten places for 2007.
Mortgage Introducer
3 January 2008
- Building societies are winning the dogfight for personal deposits with record inflows boosted by former Northern Rock savings, while banks continue to face a downturn in new savings.
'Savers spurn banks for building societies'
The Independent
29 December 2007
- An all-party parliamentary report looking at the cost of becoming a public company found millions of account-holders at former mutuals, including Alliance & Leicester and Abbey, had lost out when the societies became banks..... people often found their choice restricted after conversion as firms concentrated on shareholder value rather than customer satisfaction.
Daily Mail
1 December 2007
- [Moneyfacts] research found that three-quarters of the top mortgages came from mutuals rather than from banks. The largest lender, HBoS, which includes Halifax, had no deals in the top 250.
Mail on Sunday
4 November 2007
- 70% of the top 250 mortgages available today are offered by building societies, research from Moneyfacts.co.uk reveals.
A survey carried out by Moneyfacts.co.uk covering the whole mortgage market, including fixed, discounted and variable rates over various time periods has shown that those looking for a mortgage today may well be better off going to a building society than to one of the larger banks or mortgage lenders.
Moneyfacts press release
30 October 2007
- So don't bank on your bank - building societies have better deals.
Sunday Mirror
28 October 2007
- Lisa Taylor of Moneyfacts said: "It is worth looking at the mutuals for a good savings account, as they often have a more extensive range and pay higher rates than the banks with fewer disadvantages."
Lisa Talor, Moneyfacts quoted in Daily Telegraph
27 October 2007
- A record £2.8billion was desposited in building society savings accounts last month. The majority is believed to belong to Northern Rock customers looking for a 'safe haven' for their money. Fears that the country's fifth largest mortgage lender faced collapse saw thousands withdrawing their savings. It is now clear most then moved their money into building societies, which are seen as being run in the interests of their customers, rather than shareholders.
Daily Mail
19 October 2007 - Building societies have traditionally offered a great range of accounts paying generally good returns. Today 54% of Moneyfacts.co.uk best buy accounts are from Building Societies, dominating in particular the Mini Cash ISA market, taking 5 out of the top 6 places. Their accounts tend to pay middle to top rates, and pleasingly they don’t often pay rates towards the lower end of the market.
Rachel Thrussell, Head of Savings at Moneyfacts.co.uk
18 October 2007
- Building societies are also at the forefront of the drive for more affordable housing. Lending to housing associations increased from £1.5 billion to £2 billion in 2006, an increase of almost one-third helping to build new social housing and improve the quality of the exisiting social housing stock.
Financial Adviser
4 October 2007
- Unencumbered by demanding shareholders and long sign-off processes, many building societies are able to push forward innovative ideas for for the benefit of their customers, offering competitive and forward thinking products.
Financial Adviser
4 October 2007
- Mutuals offer many of the mortgage market's easiest to understand and fairest deals.
Exit fees are another area where societies score well. Before lenders started scrapping them in late July and early August because of regulatory pressure, only to replace them with a number of other fees, the only providers to have reduced them were mutuals.
A quick look at a best buy table from Money Mail at the time of writing shows societies leading the way.
Guy Anker, Money Mail Reporter at the Daily Mail
writing in Mortgage Strategy
3 September 2007
- Mutual organisations, such as Nationwide, are much better positioned [than banks] to be holier than thou, and highlight bad practice. They can afford to sacrifice some of their profits for more transparent and competitive products because they are owned by their customers, not by shareholders.
The Independent
13 August 2007
- There is no doubt that most building societies remain more customer-focused than the banks. Research conducted on behalf of the Building Societies Association shows that customer satisfaction levels remain the highest across financial services. Treating customers fairly seems to come more naturally to a building society than a bank. This focus on customers explains why many societies continue to invest in their branch networks while some banks are desperate to close them down.
Mail on Sunday
12 August 2007
- Building societies with decent High Street accounts for pensioners include Norwich & Peterborough, Skipton, Newcastle, Coventry, Leeds, Yorkshire, West Bromwich and Chelsea........Halifax, the largest savings bank, along with the big four clearing banks, Barclays, HSBC, Lloyds TSB and RBS/NatWest, continues to ignore pensioners looking for decent branch-based accounts.
Daily Mail
25 July 2007
- Ed Balls, Economic Secretary to the Treasury, praised building societies for leading the financial services sector in responsible lending and product innovation.
Financial Adviser
28 June 2007
- We are greatly encouraged by the efforts made by the building society sector in relation to TCF.
Julia Dunn (Head of Retail Firms Division) and Lisa Sturley (Associate, Retail Firms Division)
Financial Services Authority, writing in Butlers Building Society Guide
May 2007
- The very principles at the heart of treating customers fairly are becoming the hallmark of building societies' service to their members......we are pleased to say that as a sector mutuals are head and shoulders above the average high street bank. And that is good news.
Leader comment
Financial Adviser
31 May 2007
- Small building societies are the place to go for the best mortgage deals. New research shows they offer better rates than the big banks and dominate the Top 10 for two-year, three-year and five-year deals.
Eamonn Rice, of advice website mform.co.uk, said: "It is striking that smaller societies dominate the best buy lists, yet the 25 biggest brands account for 94 per cent of mortgages."
Building Societies can offer competitive products and reward loyalty because, unlike the banks, they don't have to pay shareholders.
Sunday People
27 May 2007
- Record numbers of building society customers are beginning to take an active interest in how their mutuals are being run.
Jeff Prestridge, Financial Mail on Sunday
27 May 2007
- The latest survey by Investment, Life & Pensions Moneyfacts has revealed how many mutual societies are outperforming the larger, more well-known life offices when it comes to their with profits payouts. In terms of the average full cost endowment payout the mutual societies outperformed their plc counterparts over all the terms surveyed (10, 15, 20 and 25 years). For instance, the mutual providers have delivered an average full cost endowment payout of £48,581 after 25 years compared with £38,463 from the average plc, a superior return of 26%.
The strong performance of the mutuals is also evident in the latest with profits bond payouts. The average difference between payouts offered by mutuals compared to plc’s is just over 5% after both five and ten years. The mutual societies are also delivering some of the highest payouts on with profits pensions, with the average mutual delivering 18% more than the average plc after 20 years.
Moneyfacts Press Release
22 May 2007
- Savers still haunted by the Farepak Christmas club scandal can finally look forward to some cheer this year. Building societies have got together to offer new festive savings accounts after the Farepak collapse last year robbed 150,000 families of £40million. Their initiative guarantees Christmas savers will not lose money - and they will even gain some extra interest.
Charles Rae and Tim Heming, The Sun
Reporting on the response by Dudley, Furness, Scarborough and Skipton Building Societies to the Farepak collapse.
22 May 2007
- The vast majority of child trust funds are being provided by mutuals.
Ed Balls MP
Economic Secretary to the Treasury
House of Commons
27 April 2007
- We need to praise the role of the mutual building societies, which do a lot of wonderful work, much of which is unsung.
Sir Nicholas Winterton MP
House of Commons
25 April 2007
- [Building] societies are about loyalty, respect, customer care, and staff inclusion. Banks are about shareholder value and profit......Staff cultures differ too. Society staff take pride in their work, have an appreciation of teamwork, believe in their mission and are committed to their employer. Bank staff are the antithesis of "There's no I in team". The bank philosophy is "Me first". And they're as chauvinistic as hell.
Peter Mounty
Freelance journalist writing in
Mortgage Strategy
16 April 2007 - From our research we have noticed that on the whole building societies manage to bring out more competitive products. Banks offer a more diverse range but they can't afford to compete all across this range, mainly because at the end of the day they need to balance their books and report back to the shareholders.
Julia Harris, Moneyfacts
14 April 2007
- The mutual sector as a whole plays a vital role in British society, and more than 19 million British individuals-one in three of the population-are members of one or more mutual societies. That is a considerable number, and it compares favourably with other forms of economic participation and mass membership. For example, there are 8 million more members of mutuals than there are listed owners of shares. Mutual organisations have more than three times as many members as trade unions.
Sir John Butterfill MP, House of Commons
23 March 2007
- The contrast between a mutual and a company can immediately be seen when we look at how they distribute the profits of their business. They do not pay dividends to shareholders, so they are able to operate on much narrower margins than plcs. That means that, all things being equal, they can deliver better value for their customers. They can also influence quite considerably the pricing policy of their competitors. For example, pressure from building societies was the main factor preventing banks from charging for access to cash machines.
Sir John Butterfill MP, House of Commons
23 March 2007
- Mutuals are consistently placed higher than plcs in the "best buy" tables on a variety of criteria, ranging from savings and mortgage rates on the one hand to annual premium-with-profits policies for insurers on the other.
Adrian Bailey MP, House of Commons
23 March 2007
- Building societies have maintained their branch networks and their roots in local communities in a way that plc banks have not.
Adrian Bailey MP, House of Commons
23 March 2007
- The absence of external shareholders means that there are no conflicts of interest between the claims of consumers and owners, leaving mutuals no incentive to exploit their customers for short-term gain. As others have said, that has led to greater trust among consumers for the products offered by the mutual sector.
Meg Hillier MP, House of Commons
23 March 2007
- Mutuals provide a competitive spark in the wider marketplace. For mortgages and mortgage rates as well as for savings rates, mutuals are at the top of the best-buy tables. That benefits not only their own members, but those in other organisations who must compete with the best-and when it comes to those basic services, mutuals and building societies are the best.
Andy Love MP, House of Commons
23 March 2007
- Demutualisation has been a disappointing experience: not an entirely negative one, but, generally, the demutualised societies have not achieved what they set out to achieve.
Andy Love MP, House of Commons
23 March 2007
- At last year's Moneyfacts awards, mutuals took almost 75 per cent. of the top three places in the nine mortgage categories. The best available rate for five-year fixed mortgages, for instant mini cash individual savings accounts, and for instant access accounts were all offered by building societies, according to a 2005 study.
Ed Balls MP, House of Commons
23 March 2007
- Other mutuals have been following the building societies' lead in corporate governance reform.
Ed Balls MP, House of Commons
23 March 2007 - So, let us celebrate mutuality and the competition it provides in financial services.
Jeff Prestridge, Personal Financial Editor of the Mail on Sunday
Writing for Financial Adviser
22 March 2007
- Mutuals again dominated the top 20 slots this year, taking 16 positions.
Rachel Thrussell, Head of Savings, Moneyfacts
Moneyfacts' survey of best cash ISA deals.
March 2007
- Mutual ownership means that societies do not have to pay dividends to private or institutional shareholders. The savings can be passed on to existing and prospective members. The net interest margin (difference between the interest paid to savers and charged to borrowers) of the sector's top ten societies averaged 1.03% at the 2005/2006 year-end, compared to around 2% for most banks. As a result, building societies consistently feature in the best mortgage buying tables.
By Nick Page and Stuart Last
UK Retail Banking Insights, PricewaterhouseCoopers
March 2007 - Building societies are owned by their members, so their profits are ploughed back into providing higher savings rates, lower mortgage rates and better value for their customers.
Charlotte Beugge
Money Mail Deputy Editor, Daily Mail
28 February 2007 - When it comes to treating customers fairly, building societies have got the banks beat by exhibiting a little tender loving care to their members and communities
Jeff Prestridge
Personal Finance Editor, Mail on Sunday, writing for Financial Adviser
20 January 2007
