Why did mutuals launch UK Savings Week?

Today is the start of the third UK Savings Week, the campaign to help people build financial resilience and make the most of their money.

UK Savings Week was launched by the BSA and its members in 2022. This year we want to involve all organisations that want to support good savings habits across the UK.

Why do we need UK Savings Week?
 

Because there are 14 million people who have less than £100 to fall back on in an emergency according to the Money & Pensions Service, while Bank of England data shows there is £250 billion of deposits in accounts not earning any interest. 

Savings can benefit individuals through improved well-being, as well as helping society as people are more resilient to life’s knocks, making them less likely to get into other financial difficulty and enabling them to be more productive at work.

Encouraging people to engage with saving can help them to start to build a buffer, and also to achieve their goals quicker.

How does UK Savings Week make a difference?
 

A savings habit isn’t going to start in a week, but by bringing together organisations that want to encourage a savings culture we can raise awareness of the benefits of saving, offer help to people who are in a position to save, and put in place some good foundations on which savings can be built.

No single organisation can solve the issue of low levels of personal savings by itself. It is through the partnership of a wide range of organisations that we can get the message out there, and offer help towards sustained savings habits.

Why was it the BSA and its members that started UK Savings Week?
 

We saw the need for someone to bring like-minded organisations together and to promote positive messages around savings.

But there are a number of reasons why building societies and credit unions, which are owned by the people who save and borrow with them, particularly embraced the idea and launched the campaign.

1. Savings have always been fundamental to how mutuals operate, and will be for the future: It was almost 250 years ago that the first building society was founded by people clubbing together to pool their savings until they all had a house. Today, building societies and credit unions still have a business model where their lending is funded substantially by retail savings, rather than wholesale money markets. 
2. Returns to savers, not to shareholders: As a saver, you automatically become a member of the building society or credit union . Being owned by customers rather than external shareholders means that mutuals don’t need to generate profits to return to shareholders. As a result they can often pay better interest rates. In 2023 building society savers received £2.1 billion more in interest on their total savings than if they had been paid the average rate across the market.
3. Save today, for tomorrow: Building societies and credit unions look to build long-term relationships with their savers. As well as paying decent interest rates over time, they invest in customer service through branches and other channels. A survey by Yougov showed that building society members were more likely to say that they would recommend their provider to friends and family than was the case with customers of other providers.
4. Access for all: Many building societies and credit unions have savings accounts that can be opened with as little as a pound. Many credit unions work with employers to offer saving direct from payroll, making it very easy to save, and some have a specific community focus, to help people from all parts of the local community to start to save. Alongside mobile apps, building societies typically sustain branch and passbook accounts that many customers value, especially vulnerable customers.

Savings and social purpose
 

The theme that ties these factors together is that as mutuals, building societies and credit unions are not just looking to serve savers as customers, but as owners. This enables and requires them to take on board members’ and potential members’ wider needs and interests. Savings are fundamental to building societies’ businesses, but also to the lives of their owners and those owners’ communities. 

Seen in this light, it is natural for building societies and credit unions to be the driving force behind UK Savings Week.

But we know we can’t change this alone. We invite all like-minded organisations to join us – get in touch or go here to access the resources to join the campaign.