UK financial organisations are all authorised by the Financial Conduct Authority (FCA) and/or the Prudential Regulatory Authority (PRA), and are either mutuals or public limited companies (PLCs). A mutual organisation is owned and run for the benefit of its members and, unlike a PLC, has no external shareholders to pay in the form of dividends and does not seek to make large profits or capital growth.
Mutuals exist for their members who benefit from the services they provide. Profits are usually re-invested for the benefits of members, although some may be used for internal finance to ensure the mutual is sustainable, safe and secure.
Most people recognise mutuals as long-established building societies, co-operatives, friendly societies and mutual insurance companies. Some of the oldest mutuals have over 100 years’ experience and a strong, proud heritage of providing members with the savings plans and insurance they need.
Today, UK mutuals are big business. They account for £90 billion in revenue every year and affect the lives of more than one in every three UK citizens. More than 25 million people are members of at least one mutual*.
These days, the mutual sector is very diverse including housing associations, clubs, employee owned bodies and specialist bodies such as football supporter trusts and community mutuals. There are also lots of new mutuals in the public sector – new independent organisations providing public services, such as NHS Foundation Trusts, Leisure Trusts, Co-operative Schools and Community Housing Schemes.