Building Society savings accounts
Savings accounts are also offered by building societies, which have traditionally been a more ethical choice than the big banks.
In our rankings, building societies all get a positive Company Ethos mark for being ‘mutuals’, i.e. owned by and run for their members. All customers are members and are able to vote at AGMs or stand for election to the Board.
Regulations stipulate that at least 75% of a building society’s assets must be held in residential property mortgages, so they are much less likely to be lending to companies with dubious ethical records.
So far as we can tell, most do a little lending to companies but almost always to small businesses to buy commercial buildings in their local areas.
All building societies do mortgage lending and most offer ISAs as well as savings accounts.
Three of them – Coventry, Cumberland, and Nationwide – also do current accounts. Many offer services nationwide but others are only open to savers in a specific region.
To find your local building society, search the members list on the Building Societies Association website. We have only covered 11 of the 43 building societies in the UK due to space and resources.
Ecology Building Society is another member of the Global Alliance for Banking on Values. It focuses on mortgage loans to make homes more energy efficient and loan support to community-led affordable housing and individual renovation projects, developing many inspiring examples of low impact living. It also participates in various policy initiatives aiming to deliver mass retrofit of homes, and in new European criteria for green mortgages.
Since 1981 it has lent to over 3,000 projects. In 2019 90% went to residential properties including sustainable new build, renovation and conversion, and 10% went to commercial and community projects including woodlands, housing cooperatives and shared ownership. Ecology BS offers Cash ISAs and Easy Access 90-day Notice, and Regular Savings accounts.
In March 2016 it became the first building society to receive the Fair Tax Mark, demonstrating its openness and transparency regarding its tax affairs.
In December 2018, Leeds Building Society also became Fair Tax Mark accredited, becoming the first national high-street financial institution certified by the FairTax Mark. It has been followed by Coventry Building Society in February 2022.
Credit unions are a widespread but lesser known option for savings accounts and other financial services. As there are around 400 in the UK, we have not included them on our table, but we do recommend them for ethical savings accounts.
Like building societies, they are mutuals owned and controlled by their members, not by external shareholders pushing for maximised profits through dodgy investments and shareholdings.
Credit unions pool their members’ money to make small loans in the community, providing an accessible and affordable alternative to the high interest rates charged by payday loans and loan sharks.
Credit unions pay out an annual dividend to savers, based on the annual profit made, and some pay interest too. There are lots of ways to pay in, including direct deductions from your wages.
To find your local credit union, search the Find Your Credit Union website run by ABCUL – the Association of British Credit Unions.
Also see our feature about saving with credit unions.