Mutuality – what does it all mean?
You might be wondering, what exactly is a building society - or a ‘mutual’, as it’s sometimes known. More importantly, you want to know what mutuality means for you...
Where it all began
The idea of mutual saving isn’t a new one. It all began back in the 18th century, when times were tough and buying your own home wasn’t easy. In 1775 a group of friends met and devised a unique solution. They had realised that it was in their best interests to work together, so whether they had a little money or a lot, they all agreed to pool their savings to buy some land and build houses.
As the years went by, the founders added savers to their society, making an already clever model even stronger. They used the savings to help fund mortgages for other members, while property assets provided security for the savings.
This idea of mutual saving and lending still exists today and is what we now call a building society.
A modern mutual
Leeds Building Society was established in 1875, following the very same principles. In fact, even today, over 140 years later, we still uphold the exact same values.
Times do change though: experience and technological innovation mean we’re now considerably more advanced. And, as we grow, we’re able to help more people as more savers means we can help more borrowers. Each year we help more members save for the things they want or need, or to borrow to buy a home.
A society, not a bank
We think it’s important for our members to know how we’re different to a bank. The biggest difference is that most banks are companies, usually listed on the stock market. That means they are run for the benefit of their shareholders, so a lot of their profits go into paying bonuses and dividends.
Building societies are different. First and foremost, we are owned by you, our members. We don’t have shareholders so we don’t pay dividends. We reinvest profit into the business for the benefit of current and future members. Perhaps most importantly though, we still hold true to one of the key principles of a mutual; we bring savers and borrowers together to create a mutually beneficial relationship in which both help to secure the other.
We answer to you
Our members have the opportunity to help shape our future by voting on how we’re run. That’s why we invite you to our AGM (Annual General Meeting). From the charities we support, through to which Directors run the Society, your views matter to us. We welcome your feedback all year round and encourage you to get involved in our online member forum, TalkingPoint.
Our profits are invested back into the business each year to help to secure our future, continually improve our service and to keep our products as competitive as possible.