What is a friendly society?

friendly society

What is a friendly society? According to Cambridge Dictionary, a friendly society (otherwise known as a mutual) is an organisation to which members pay small amounts of money over a long period so that when they are ill or old they will receive money back.

Similarly to building societies, friendly societies have been traditionally founded by groups of people who shared their resources to get rewards, or to provide protection for themselves in times of need.

Friendly societies are registered under either the Friendly Societies Act 1974 or the Friendly Societies Act 1992. Those that are registered under the Friendly Societies Act 1992 are incorporated entities and are registered for effecting and carrying out contracts of insurance.

Mutual associations are one of the oldest types of financial services operations around and offer their members a wide range of affordable savings, investments, insurances, pensions and specialist annuities, to provide the financial protection and solutions that are required.

Nowadays, friendly societies offer you similar services to banks or insurance companies. However, the difference is that the profits made by friendly societies don’t go to shareholders; instead, they are retained for the benefit of the policyholders.

Related: Stocks and shares ISA: Make your money work harder

Friendly Societies have a unique legal status, which means they can offer some tax-exempt savings products that are not available from high street banks.

How do Shepherds Friendly Society invest my money?



Here at Shepherds Friendly we are proud to say that we have paid a 3% bonus into our ISAs for the past 9 years, and with the uncertainty of the economy at the moment, we believe this is something to shout about. Being a friendly society is one of the reasons why we can provide this excellent customer service to our members.

Is investing with a friendly society a sensible option?

In today’s uncertain financial climate, many people believe friendly societies offer a sensible option. Friendly societies don’t have external investment, and as such they don’t have anyone else to pay any of the profit they make to, and this means you could potentially make more from the money you invest than with a company that is not a mutual.

Related: Find out about the history of Shepherds Friendly

Shepherds Friendly Society was founded on Christmas day in 1826, as a sickness and benefits society. We were an amalgamation of various fraternal groups, including the Royal Shepherds Sanctuary Benefits Society and the Ancient order of Shepherds.

Our founders believed in forming a mutually beneficial society, within which they could all invest regularly, and that would then support them financially in the event that sickness or injury prevented them from working and they lost their income.

We are all about helping members to help themselves financially, to make a positive impact on their lives. The main aims of Shepherds Friendly reflect all that is expected of a friendly society. Our number one goal is put our members at the heart of everything that we do, to ensure that they get the best service possible and the best returns on their investment that we can offer.

If you would like an idea on what plan might be best to suit your needs, use our ‘choose a savings plan‘ tool discover what options are available, whether you’re looking to start a savings plan for yourself or for a child. 

As a financial mutual society, we are a member of the Association of Financial Mutuals (AFM). The AFM is the trade body that represents mutual insurers in the UK. You can use the AFM website to find out more about the benefits of mutuality, and to see the importance of mutuals to the wider economy in the UK.



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