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Do mutuals matter? I hear you ask. And, for that matter, what is a mutual anyway?

Okay, pay attention at the back; let’s start at the beginning:

A mutual is an organisation owned by its members and run for their benefit.

Instead of focusing on profit and keeping shareholders happy, mutual members contribute to one big ‘pot’, then benefit from the resulting services and products, including tax-free savings, investments and insurance.

Mutuals take many forms, including building societies, co-operatives, housing associations, credit unions and NHS Foundation Trusts.

They’re popular too — more than 900,000 people currently work in some form of mutual society, with millions of members and annual revenues of over £95billion.*

Which is all very well. But why do they matter more than ever today?

Well, after the recent economic turmoil, public trust in financial institutions is at an all-time low, with many businesses’ reputations damaged.

But the mutual sector has stayed relatively unscathed — because it’s not reliant on fickle markets, investor mood-swings or complicated investments.

As a result, people now recognise the importance of businesses that work in their interest, focusing on service and quality rather than risk-taking and profits at all costs.

Governments, too, know that diversity in their economies is important — with mutuals a central part of this healthy mix.

So as memberships continue to expand, here’s seven other reasons why mutuals really matter:

1. Size

Mutuals are big business. Over 20 million people in the UK are members of at least one mutual.*

2. Diversity

Mutuals are good for the markets. Their presence means there’s a permanent competitive pressure on firms whose sole motivation is profit.

3. Sharing

Mutuals are successful because they share profits through lower prices to customers and dividends to members. Therefore, the reward for loyalty and hard work is received by customers.

4. Trust

Mutuals serve the needs of customers and employees, rather than shareholders. They don’t need to answer to the demands of investors eager to take ever-greater risks in order to extract more profit.

5. Services

Mutuals are seen as a good choice for providing public services. NHS Foundation Trusts and Co-operative Trust Schools show how public providers can be converted to high quality, businesslike bodies, directly accountable to the people they serve.

6. Popularity

In employee-owned businesses, staff satisfaction levels are significantly greater than in the wider economy.

7. Inclusive

Mutuals also take a long-term view on savings and investment, which positions them to provide financial products inclusive to all levels of society.

So it’s clear that, as well as serving their members and working in the wider interests of society, mutuals are more important than ever.

They encourage self-help and personal responsibility, with members sharing the benefits and profits of their mutual trade.

They also bring vital choice and competition to the UK financial services sector, while helping to stabilise the market.

With no shareholders to pay, profits are retained for the benefit of customers. And they have proved increasingly complementary to public services.

But most importantly, mutuals prove that people can achieve most when they work together — and that the resulting rewards should always be shared with those that have earned them.

* Source:

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.