£20.7bn boost: How local building societies are driving savings growth

In 2023, building societies paid £2.1 billion more savings interest to their savers than they would have if they paid the average rates offered by the largest banks. This information, released as part of the BSA’s ‘Original Money Movement’ campaign, highlights the crucial role that mutual organisations, such as Marsden Building Society, play in supporting local people and communities.

The research also indicates that building societies are more likely than banks to maintain their presence on the high street. Currently, building societies hold a 30% share of UK high street branches, which is more than double the 14% share they had in 2013. Now in its 165th year, Marsden Building Society remains committed to the high street with ongoing refurbishments of its branch network.

The Marsden has also recently opened applications for its 2025 Charitable Foundation fund, allowing Lancashire projects and causes to apply for grants of up to £3,000. The importance of this fund is underscored by the BSA’s statistics, which show that 72% of building society customers feel they’re an important part of their community, compared to just 54% of bank customers*.

Rob Pheasey, Chief Executive of Marsden Building Society, stated: “We’ve never lost sight of our purpose, which is to build something better for Lancashire. This data from the BSA highlights the significance of building societies and the importance of investing in the areas we serve. Whether through our Charitable Foundation or our affinity savings accounts, giving back to our local communities shapes our identity as a Lancashire business and employer.

“We’re committed to the high street for those who value our face-to-face service. At the same time, we’re making significant IT investments to support members who prefer to engage with us online.

“I’m proud that our approach to business differs from banks. We represent the original money movement, established by ordinary working people for ordinary working people, to help local communities thrive.”

Building societies are member-owned organisations and therefore don’t have external shareholders. Borrowers and savers become members when they take out a mortgage or open a savings account. This is the key difference from banks, whose driving force is creating profits to pay out to their external shareholders.

The different ownership means building societies are run purely for the benefit of their customers, which is reflected in their rates, products and services. Whilst not driven to maximise profits, building societies make enough profit to ensure they remain safe and sustainable. However, unlike banks, building society profits are reinvested back into the business and local communities, giving their customers overall better value and service.

*Doesn’t include the branches of Virgin Money or Co-operative Bank which are now owned by building societies.