Building societies in Yorkshire have more than 5 million members, which means the region is home to nearly a fifth (19%) of all members in the UK.
Yorkshire Building Society, which has a branch in Sheffield, and is the biggest of Yorkshire’s five building societies with nearly 3 million members, has calculated that the UK population could have earned an additional £9 billion in 2024, or an extra £248 each, had savings been held with them instead of a bank. The mutual paid an average savings rate of 4.21% over 2024, 27% higher than the market average, meaning its savers earned an extra £430.2m.
The Society is supporting a campaign by the Building Societies Association that celebrates 250 years since the first mutual society was founded and shows how building societies differ from banks because they are owned by their customers, known as members. Without external shareholders, they make decisions for the benefit of members, and profits are used to return more to members and reinvest into the business and local communities.
Recent research by Yorkshire Building Society found that most adults keep their savings with a high street bank, even though building societies pay more interest and are perceived more positively.
More than half (55%) of Brits have their main savings account with a traditional bank, compared to less than a quarter (23%) who use a building society.
The research also found that more than half (57%) of people have a mortgage with a bank, compared to just over a third (36%) with a building society. The gap was wider among 18-34 year-olds – almost a third (32%) said they had a mortgage with a building society and two thirds (63%) with a bank, while over 55s were slightly more likely to have a mortgage with a building society (43%) than with a bank (42%).
If younger generations are overlooking building societies – typically more likely to offer mortgages aimed at helping first-time buyers – they could be pushing the dream of home ownership further out of reach.
Yorkshire Building Society’s £5k Deposit Mortgage – which allows people to buy a home worth up to £500,000 with a deposit of just £5,000 – is aimed at enabling aspiring homebuyers to save a deposit in around two years, no matter where they are in the country. In contrast, the time needed to save a 5% deposit, the minimum amount required by many other lenders, is between three and eight years depending on location.
Most (80%) of 18-34 year-olds thought they would need to find a deposit of at least £10,000 to buy a house.
The Society’s research also found that building societies are perceived more positively than traditional banks on many measures, with respondents being more likely to agree that building societies are trustworthy and reliable, provide good customer service, offer competitive rates and benefits and have a strong community focus.
One explanation for customers continuing to choose banks may be that there is poor understanding of what makes building societies different, especially among younger people.
When asked if they had heard of the term “mutuality”, 65% of respondents said they had, though over 55s were much more likely to be aware (74%) than 18-34s (54%). However, less than half of those aware of the term were able to define it correctly.
Tom Simpson, interim chief commercial officer at Yorkshire Building Society, said: “Building societies were set up to help ordinary working people own their home and to provide a safe home for people’s savings.
“160 years later, and Yorkshire Building Society is still protecting people’s savings and using these as the means for others to buy a home, helping the communities where our members live and work.
“We have never lost sight of our purpose – to help our members to save, build financial wellbeing and become homeowners.
“I am proud that we do business differently to banks. We were set up by ordinary working people, for ordinary working people and to help local communities to thrive.”