Better Together – The Growing Strength of Mutuals in the UK

25.10.2018 by Jim Ker

Mutuals are going from strength to strength in the UK, where more than 1 in every 3 UK citizens is a member of at least one mutual, accounting for £100 billion in revenue every year.* Whilst some big names in finance have struggled, the mutual ethos seems to have struck a chord with British consumers who are looking for greater transparency when making investment choices.

The mutual foundations of trust, shared benefit and ownership provide a refreshing alternative to companies that put profit above all else. A Mutual is a financial organisation run entirely for the benefit of its Members. That’s all. When a Mutual Society makes profits on investments, these are shared amongst its Members, as bonuses, or reinvested to benefit them further. A Mutual has no shareholders to pay out.

Returns: Over the long-term, Mutuals seek to provide better returns than Private Limited Companies. With no shareholders to cream the top off investment returns, this can be achieved without taking undue risks with the Members’ money.

Trust: Safe in the knowledge that Mutuals are responsible only to their Members, research conducted by the AFM found that people are far more likely to recommend a Mutual organisation than a Private Limited Company (PLC).

Happy Members: Mutual societies report higher customer satisfaction levels than other banking organisations, feeling that staff work harder when working in an organisation owned by their customers.

Having your say: As might be expected in an organisation owned by its Members, Mutuals tend to focus heavily on making it easier for their Members to do business with them and have a say in how the organisation is run. There are many ways to have your say as the Member of a Mutual such as feedback, member panels or attending their AGM.

Benefits for the Economy: According to the Association of Financial Mutuals (AFM), Financial Mutuals play an important role in maintaining stability in the UK economy. The presence of a stable Mutual sector applies competitive pressure on profit-seeking PLCs. This pressure buffers the UK economy from seeing such large fluctuations, should the stock markets experience significant peaks and troughs.

Tax-Exempt Savings: People can save up to a maximum of £25 / month (or £270 / year) tax-free with Friendly Societies in a Tax Exempt Savings Plan. This is in addition to your Individual Savings Account (ISA) allowance. These Tax-Exempt savings schemes are specific to Friendly Societies and are available to both adults and children. Learn more about our Tax Exempt Savings Plan or TESP here.

Protection: Mutual societies are regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). Additionally, they are covered by the Financial Services Compensation Scheme (FSCS) that offers protection to members savings should the institution Fail.

*Source: Association of Financial Mutuals (AFM)

Please Note: You must confirm you have read the key facts, before downloading this document.

Key Facts about our services and costs

1. The Financial Conduct Authority (FCA)

The FCA is the independent watchdog that regulates financial services. This document is designed by the FCA to be given to consumers buying certain financial products. You need to read this important document. It explains the service you are being offered and how you will pay for it.

2. Whose products do we offer?

We offer products from the whole market

We only offer products from a limited number of companies

We only offer our own products

3. Which service will we provide you with?

We will advise and make a recommendation for you after we have assessed your needs.

You will not receive advice or a recommendation from us. We may ask some questions to narrow down the selection of products that we will provide details on. You will then need to make your own choice about how to proceed.

We will provide basic advice on a limited range of stakeholder products and in order to do this we will ask some questions about your income, savings and other circumstances but we will not:

  • conduct a full assessment of your needs;
  • offer advice on whether a non-stakeholder product may be more suitable.

We can only offer products from Kingston Unity Friendly Society. These products will enable you to:

  • protect yourself and your loved ones in the event of death
  • save and invest with the added benefit of protecting yourself and your loved ones in the event of death
  • provide benefit cover in the event of sickness

4. What will you have to pay us for our services?

Normally, if you buy a financial product direct from us, there will be no payments such as commission or fees payable. If there are any commission or fees payable, we will tell you how we get paid and the amount before we carry out any business for you.

5. Who regulates us?

Kingston Unity Friendly Society, 9 Navigation Court, Calder Park, Wakefield, WF2 7BJ is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and .the Prudential Regulation Authority. Kingston Unity Friendly Society’s FCA Registered Number is 110056.

Kingston Unity Friendly Society permitted business is advising and arranging life assurance and pensions business.

You can check this on the FCA’s Register by visiting the FCA’s website or by contacting the FCA on 0845 606 1234.

6. What to do if you have a complaint

If you wish to register a complaint, please contact us:
…in writing Write to Kingston Unity Friendly Society, Complaints Department, 9 Navigation Court, Calder Park, Wakefield, WF2 7BJ. …by phoneTelephone (01924) 240164

If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service.

7. Are we covered by the Financial Services Compensation Scheme (FSCS)?

We are covered by the FSCS. You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim.

Most types of insurance business are covered for 90% of the claim with no upper limit.