Chapter Summary: Savings
Building societies have a strong track record of attracting new customers and raising capital over recent years, but it is becoming increasingly expensive. Most societies have successfully grown their savings base, although some have faced fewer challenges than others in maintaining this growth. Overall, the sector has recovered from the decline in savings market share and exceeded pre-pandemic levels.
Savings Channels
The report notes that digital savings channels have grown rapidly, significantly shifting customer acquisition strategies. Some societies maintain strong branch-based models, while others leverage digital partners like Raisin and Flagstone. A growing number rely on comparison websites and best-buy tables.
As Phillippa Cardno, CEO of Newbury Building Society, puts it:
“Even though we have an online proposition, the branch is the preferred channel for the majority of our savings customers.”
Target Audiences
Different societies are targeting varied demographics, some continuing to serve older, wealthier customers; others exploring how to appeal to younger, digital-savvy audiences. However, maintaining relationships in a digital environment is complex, and societies must find innovative ways to deliver mutual value online.
Stuart Haire, CEO of Skipton Group, highlights a key consideration for building societies over the coming years:
“It will be interesting to see whether the relationship societies have with their members, particularly the sentiment around trust and stability, resonates with a specific generation, or whether it is generational. Maybe as today’s younger generations age, they may come to appreciate the power of relationships and the stability that building societies provide.”
Savings Rates and Competition
Rising competition, especially from app-based challengers, has intensified the savings market. These challengers often operate with lower overheads and can offer more aggressive rates.
James Paterson, CEO of Dudley Building Society, explains:
“It can be very hard to compete in the online savings space. Some emerging business models attract savings customers, but don’t lend their deposits. That’s affected the dynamics of the market for building societies.”
Technology and Switching Behaviour
Customer willingness to switch providers has grown, making retention more difficult. According to recent survey data, 88% of savers would consider moving their money in the next six months if rates fall. Building societies must invest in digital tools while retaining their service-led reputation.
Peter Burrows, CEO of Cambridge Building Society, highlights the challenge building societies face:
“If the savings world continues to become more digital and intermediated, competition will intensify. A lot of the differentiators that building societies have spent decades in building, like trust and good service, could be eroded overnight.”
Preserving the Human Touch
Despite the shift towards digital, many building societies remain committed to human interaction and personalised service. Branches continue to play a crucial role, especially for certain demographics who value in-person support. This commitment to service is often reflected in the sector’s continued investment in hybrid experiences that blend digital efficiency with the trust and reassurance of face-to-face engagement.
Changing Funding Mix
The savings base has grown overall, but some societies have had to rebalance away from wholesale funding towards retail savings to repay the Bank of England’s Term Funding Scheme. This shift has added pressure to attract and retain depositors, increasing the importance of product innovation.
Alun Williams, CEO at Swansea Building Society, explains:
“What we’ve seen is the makeup of some building society balance sheets has changed, as they’ve had to take in retail funding from customers to help repay the Bank of England’s Term Funding Scheme (TFS). So, when you see the results coming through from 2024 and 2025 you’ll see the mix of some building societies changing from wholesale funding to more retail and SME deposits. I would say that’s been more of an influence to savings than the move to online.”
What next?
Building relationships with customers in a digital environment is significantly more complex than through traditional in-branch interactions. Given that one of the core strengths of building societies lies in their mutuality, personalised service, and close relationships with members, this shift presents a real challenge and opportunity.
In an increasingly competitive and commoditised landscape, maintaining a sense of connection and loyalty in a digital-first world will require building societies to apply new strategies, stronger brand storytelling, and innovative ways to bring the mutual model to life online.
This is Blog 3 in our nine-part series covering the Building Societies Report 2025. You can explore the full series here:
- Blog 1: Strategy & Mutuality
- Blog 2: Mortgages
- Blog 3: Savings
- Blog 4: Branch of the Future
- Blog 5: Homebuying Process
- Blog 6: Green Finance
- Blog 7: Diversification & Collaboration
- Blog 8: Technology
- Blog 9: Regulation, Policy & Risk
The Building Societies Report 2025 was created in partnership with the Building Societies Association and made possible by the support of sector sponsors including: BJSS, Digilytics, Finova, FintechOS, FIS, GDS Link, Mambu, Mast, Monument Technology, Mutual Vision, MQube, nCino, Ohpen, PEXA, Phoebus, RSM UK, SBS, Target Group, Temenos , Unblu, Unisys, and Vilja Solutions.