A saver or a borrower - they’re all members but how do they work together and how do we balance how we treat them so we’re putting all our members first?

A bit of a history lesson (a quick reminder for colleagues)

Way back in the eighteenth century, only the rich had access to banking and financial services. If you weren’t one of the lucky ones, it could be a bit of a struggle with insecure and unsafe housing. That was the start of the mutual society – lending to ordinary people, so they could buy land and build their own home.

Since YBS was formed nearly 160 years ago not much has changed from those mutual principles, we still exist to help borrowers buy their own home and for savers to have somewhere safe for their savings.

A reminder of how the building society model works:

Being a part of YBS means our members get to help others (while they help themselves) – it’s a mutually rewarding relationship.

And it doesn’t matter how much or how little each saver brings, because together this money makes a big difference when we lend it to our borrowers to help them fulfil the dream of owning their own home. Then, when our borrowers pay us interest on their loans, we give some of that interest back to our savers, in return for leaving their money with us.

A new membership email for our members

We’ve introduced this as another step in our customer journey communications. It goes to all new members that are opted in to receive marketing communication, about 2 weeks after they receive their welcome email after opening their account with us. It explains a bit about our history, why we do what we do and how we’re performing now as one of the UKs largest societies.

Check out our latest video on the relationship between borrowers and savers on the member benefits hub

Our commitment to financial resilience seems more relevant than ever.

Following on from the Chancellors Spring statement it’s clear the cost of living crisis is high on the agenda, with many households struggling with rising costs.

Nitesh Patel, YBS Economist commented:

"The pressure is not new for many lower-income households, who were more likely to be in financial difficulty during the Covid-19 pandemic and will now need to spend an even greater proportion of their income just to get by.

Many families will need to rely on savings, however research commissioned last week by Yorkshire Building Society found that a quarter of Brits have less than £250 in savings to fall back on.

For those who have found it more difficult to save during the pandemic, or don’t save at all, relying on savings may not be an option. “

Against a backdrop of cost of living increases, we’ve continued to provide that real help with real life.

We’ve continued to support our members to build their financial resilience with over 203,000 savings accounts opened last year, bringing savings balances to a record £35.5bn. This is further demonstrated by the £41m we passed back to savers through our membership programme and interest rate rises.

Last year we increased our mortgage balances to £41.9bn, the highest in our history, by providing over 75,000 mortgages. We remain committed to supporting first-time buyers who are less well served by the wider market, and last year helped a record 42,000 people to have a place to call home through our first-time buyer mortgages.

The Annual Report and Accounts went live on the website last week and can be found on our financial results page. On the same page you'll also see the financial results highlights for 2021, which provides a summary of the full ARA and was released to the media and colleagues a few weeks ago.

We’ve come a long way from assets of just over £4,000 in 1864 to £52billion at the end of 2021.

Going forward

We’re conscious savers are having a tough time and rates have been historically very low, following the Bank of England increases to the Bank Rate we’ve been passing on that benefit to savers.

Jane Childs, Product Manager, Mortgages explains about how we calculate our interest rates, price products and the balancing act between savers and borrowers:

“As a building society we use the savings deposited by our customers to enable us to lend to customers needing to borrow to acquire their home.  This means that when we are pricing savings products we need to do so at a level which will attract the level of savings needed to meet or lending ambitions.  At times of lending growth this means retaining and acquiring customers at competitive rates.  Not being able to do so may limit our ability to lend to borrowers.  However there needs to be a balance between what we pay to savers and the interest rates we charge to borrowers in order to meet profit requirements.  Even as a mutual we need to make profits in order for the business to be sustainable in the long term, to provide for investment in infrastructure and security for our customers and investors."

Chris Irwin, Director of Savings comments on the recent decision to increase savings rates:

“Our decision today to not only pass on at least the full Bank rate rise to 96% of our existing variable rate savings book, but to also make further increases to most of our accounts continues to reflect our mutual ethos of putting our members first.

Supporting our savers is a key element of the Society’s purpose, ensuring we deliver value to our members, which in turn supports their financial resilience so we’re delighted to be able to make further increases to our savings products especially in the current financial climate. As a result of our decision today, 99% of our interest-bearing variable rate accounts will benefit from increased interest.”

We put our members first

A lot of our actions are driven by the fact that we’re a building society. Owned by our members. As an owner of any business you have a say in how its run and we’re no different. Eligible members should have received their AGM packs now, either by post or online, and these include an overview of how we’ve done in 2021 and our future plans. Voting at the AGM is one of the ways members can have a say and get involved so please encourage them to do so.

This year for the first time we’ve added a unique QR code to the paper packs, so members can scan and go straight through to vote without entering their code. We’re hoping this will increase voting while making it much simpler and easier for members too.

Check list

• Read the ARA – or highlights, it’s quite a lengthy document so this is a good alternative!
• We’ll be contacting nearly 1m savers over the next few weeks to let them know their interest rate increased on 5 April – it means for these accounts that the lowest rate will be O.85%, that’s a really good news message for our members.
• Remind yourself of where we’re from and what we stand for – have a quick look at the video on the member benefits hub
• Speak to members about the AGM and encourage them to get involved and vote. If they got a paper pack using their unique QR code is really quick and easy.