Finance Guide

Building Societies were originally created in the United Kingdom to help poorer people construct homes for themselves. Members of the society would pool their savings within the organisation. When sufficient funds had been accumulated to purchase or construct a home, the money would be transferred to one member of the society. The process would continue until all members of the organisation had their own home. Originally, therefore, building societies had a limited lifespan. When all of the founding members had their own home, the organisation would shut down.

Later on, it became common for building societies to continue in a permanent existence, continually accepting new members.
In the 20th century the regulations which governed financial institutions have been progressively loosened. The many local building societies which once existed have either shut down or been merged to create larger ones. Building societies now offer a wide range of financial services and there is little to distinguish them from conventional banks.

Being a member of a building society once granted a say in how the organisation was run. Members would be able to vote on proposals, for example. This is still the case with some building societies. Others have “de-mutualized” and transformed themselves into share-based corporations.

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