8 min read

We’re a mutual – but what does that mean?

Mutual organisations have been around for centuries, yet, many people are unfamiliar with the term ‘mutual’ and its overall concept. So what does being a mutual actually mean? The core principles of mutuality are based upon helping people to improve their economic status, with a view to making their lives more financially secure.

A grandfather hugs his grandson.

To help you to understand what this is all about, we’ve explained what mutuality is and how it all started.

What is a mutual?

Mutuals are organisations that are owned by their customers. Or in the case of businesses like John Lewis, they are co-owned by their employees who have shares in the business. They take many different forms such as friendly societies (like OneFamily), building societies and co-operatives. The mutual sector encompasses a wide range of organisations including housing associations, credit unions, football supporters’ trusts and community mutuals.

History of friendly societies

The earliest friendly society on record was the ‘Incorporation of Carters in Leith’, Scotland, founded in 1555.  But it wasn’t until the 18th century that friendly societies rose to prominence.

Formed before the safety net of the NHS and state assistance, friendly societies existed to support communities. They provided the assurance that the main bread winner’s family would be provided for in the event of ill health or death. They joined communities of individuals with similar needs or circumstances. They then pooled their resources in a mutual fund they could call on when facing challenging times.

Friendly societies developed specialisms in different areas over the years and now provide services such as healthcare, savings and insurance.

How is a mutual business run?

Unlike most financial organisations, a mutual doesn’t have any shareholders. Instead, customers collectively own the business.  This means that customers can have a say on how the organisation is run. Every year, mutuals hold Annual General Meetings where customers can vote for the directors they want to manage the business. Members are frequently invited to give feedback through surveys, focus groups or events and play a fundamental role in shaping the future of the organisation.

Why are mutuals different?

With absolutely no shareholders taking slices of the returns, profits can be used entirely to benefit members. Whether this is used to provide an extended product range, better returns on investments or charitable funding, mutuals channel all of their energy into doing what’s right for their customers.  That’s why they’re able to offer a number of benefits that the world of financial services simply can’t…


Friendly societies are known for being personal, trustworthy and approachable. After all, they’ve supported communities and looked after customers’ interests since their inception. They genuinely care about their customers and want to make a positive difference to their lives and the lives of those around them. In fact, the Mutuals Manifesto report states that customers trust mutuals more than government run organisations or private businesses1.

Strong relationships

Mutuals are known for sticking together – they’ve got a real knack for making friends.  That’s why OneFamily is an active member of three trade bodies that represent friendly societies, mutual insurers, and other financial mutuals in the UK:

  • Association of Financial Mutuals – aims to develop and support a strong mutual insurance sector
  • Mutuo – is an organisation which promotes the interests of the mutual sector to Government, media and other decision makers
  • ICMIF – a global organisation representing cooperative and mutual insurers from around the world.

Good customer service

Mutual insurers give better value and higher levels of service, according to the Mutuals Manifesto report1. This is because customers are at the heart of everything they do.

Innovative products

As stated in the Mutuals Manifesto report1, friendly societies have an excellent record of adapting to new product innovations. This might have something to do with the fact that they work so closely with their members. By listening to what their customers have to say, they can hone and perfect products around their needs.

Giving something back

Mutuals are not all about products though. Helping others to help themselves is embedded in their ethos, which is why friendly societies are recognised for providing a wider responsibility to customers and their communities. For example, OneFamily has supported local and national charities, individuals in need and community projects across the country.


1 Association of Financial Mutuals (May, 2010), “The Mutual Manifesto” [online]. Available from http://www.financialmutuals.org/advantage/the-mutual-manifesto

Note: Whilst we take care to ensure Talking Finance content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions.