Financial well-being: are we hiding our light under a bushel?

Originally published in BSA Society Matters magazine.

Originally published in BSA Society Matters magazine.
Printed March 2020.

Inevitably, much of the regulatory focus on mental health and vulnerability is about supporting customers with mental health problems and/or those displaying signs of vulnerability.

And quite rightly so.

But as I learnt during nine years as a trustee of a leading benevolent association, a positive focus on mental health and wellbeing is just as important. There will always be those individuals who need our help because of their condition and situation – and much of this edition of Society Matters focuses on just that.

Many more can benefit from help in preventing mental health and vulnerability conditions and situations developing in the first place. This is not a question of either/ or – it must be both.SMSPRING2020.jpg

In a sense, the entire history of the building society, credit union and wider financial mutual sector has been about this combination of prevention and support. Collective savings schemes to provide decent homes that were beyond the reach of any individual member of the early terminating building societies. Mutual funds to support families through periods of unemployment, sickness and to ensure decent burials rather than the pauper’s grave. Affordable credit for those otherwise dependant on backstreet and payday lenders.

And today? Building societies and credit unions are rightly proud of being genuinely purpose driven businesses, working to deliver real value to their members.

But I wonder if we do enough to contribute positively to and improve our members’ wellbeing? Or is this a light that we tend to hide under a bushel? Or perhaps a light that we need to turn up brighter?

At our recent annual Associates Briefing, I was struck by Ger O’Keeffe introducing colleagues to the global headquarters of the mighty Buckinghamshire Building Society, complete with pictures of Chalfont St Giles’s beautiful village green and duck pond. And there we have it in a nutshell – a local community based, customer owned financial services business sitting unobtrusively in an idyllic British scene.

A trusted part of that community. An important local employer. Looking at their website, you find an organisation supporting local schools, clubs and charities.

In their own words, acting “as champions for the village of Chalfont St Giles and regularly supporting local events and community initiatives such as the annual fireworks, Christmas lights and the summer village show.”

You find a charitable foundation, a Living Wage employer, a business that aims to help customers in vulnerable circumstances – and go beyond that by signing up to the “Safe Place Scheme” – offering a place of safety to those in the community who find themselves distressed, or at potential risk whilst out alone.

And yet, I am fairly certain that is you were to ask the staff at the Bucks, they would view all this as just the way they do business. Proud yes, but hardly shouting it from the rooftops.


Why single out the Bucks? No reason at all, as the story is essentially the same across the whole of the sector, and feels completely embedded in a way that seems absent from so many corporate community programmes.

And there is so much more in the core business of building societies and credit unions.

Research by Salary Finance and Yorkshire Building Society last year made the direct link between lack of household financial resilience and mental health: “people worry more about money and finance than their health, relationships or career problems. People who have money worries are 7.6 times more likely not to finish daily tasks, 8.8 times more likely to have sleepless nights and 5.7 times more likely to have troubled relationships at work.”

So it is no surprise that BSA members have warmly welcomed the work of our Savings Taskforce in focusing on developing materials and toolkits to promote workplace, payroll deduction savings schemes targeted at the 7.5m people in the UK in employment, but with no savings.

In January we were proud to announce a target of getting 1m of those employees saving by 2025, on the same day that the Money and Pensions Service announced their ambition of having 2m more savers in the UK by 2030. This is in employers’ interests and it in the national interest. Drawing again from the Salary Finance and YBS research, “Employees with money worries are likely to be less productive, have more troubled relationships at work and be looking for a new job.

When combined with the cost of increased turnover, poor financial wellbeing is costing the average employer between 13% and 17% of their total payroll cost.” That’s equivalent to between £39bn and £51bn a year to the UK economy.

And this is just the latest initiative. As we know, building societies have led the way in responsible later life lending. They are expert in providing mortgages to the growing population who are self-employed, self-builders, gig workers or otherwise deserving of much better than a computer-says-no response to their dreams of home ownership.

Building societies have maintained branches in communities otherwise deserted by the main banks – and indeed in the case of Newcastle Building Society are making a real virtue of working with local communities in Yarm, Hawes and Wooler to build real community hubs, supporting services way beyond the business of the building society alone.

Through the Building Societies Trust, we are also delighted and proud to be able to support a range of charities focused on supporting and improving wellbeing – be that the outstanding financial education in schools provided by MyBnk, or the programmes run by Crisis, Centrepoint and others helping people out of homelessness, teaching them to manage on a budget and deal with landlords.

What next? More of the same and then some I would suggest. There has been a lot of talk recently about business re-discovering its purpose in society beyond maximising value for shareholders. That debate is likely to rage for years.

In the meantime, we in the mutual sector should carry on as we have always done – getting on with the day to day business of delivering real value for our members.

The £2.5bn additional interest that building society members have received compared with what they would on average have earned over the past three years putting their savings with a high street bank is impressive.

How much more impressive if we can also add materially to our members’ wellbeing by helping them improve their financial resilience. And in consequence, knock a substantial hole in that £51bn of productivity lost to the UK economy each year.

Now that would be worth shouting about!


Next steps:

You can follow Robin on Twitter @bsaceo