Friendly societies
The Law Commission has been asked by HM Treasury to review the legal framework governing friendly societies.
Consultation open until 11 June 2025
If you have an interest in or awareness of this area of law, we want to hear your views.
Find out how to respond
Read the full consultation paper and consultation paper summary. There is also a factsheet for members, and a Welsh version of the factsheet for members.
Respond using the online response form.
If you need any of the documents in an alternative format, email us at friendlies@lawcommission.gov.uk .
Background (Back to top)
A friendly society is an organisation which provides insurance or other benefits to its members, primarily funded by its members. In providing schemes of mutual support, friendly societies can serve an important commercial purpose, especially in terms of fostering economic corporate diversity and financial inclusion.
Friendly societies subscribe to a mutual ownership model. This means they are owned and run by their members, and profits are distributed to the membership or reinvested for the benefit of the membership. They do not have shareholders or outside investors.
Friendly societies have a long and illustrious history in the UK, having enjoyed statutory recognition since the 1700s. The recognition of friendly societies was in part due to friendly societies’ provision of self-help, which meant less reliance on other forms of assistance such as through parishes or charitable organisations. Over the years they have provided financial and other benefits to millions of people across the UK.
Friendly societies can play a significant role in the lives of their members and in the wider economy. They can:
- foster social cohesion among a membership with common values; and
- provide some level of financial support to their members, through non-contractual discretionary benefits or contractual benefits (related to insurance contracts, for instance).
Friendly societies that provide contractual benefits must have permission to do so under the Financial Services and Markets Act 2000. These kinds of friendly societies are regulated and authorised by the Prudential Regulation Authority, in addition to the Financial Conduct Authority, which acts as the conduct regulator and registering authority for friendly societies.
Project (Back to top)
This project reviews the Friendly Societies Act 1974 (“1974 Act”) and the Friendly Societies Act 1992 (“1992 Act”). The 1974 Act remains in force until there are no longer any societies registered under it. Friendly societies registered under the 1974 Act are governed by that Act and the 1992 Act. By contrast, friendly societies registered and incorporated under the 1992 Act are governed solely by the 1992 Act. Any new friendly societies will fall within the scope of the 1992 Act alone.
There are also other types of societies registered under the 1974 Act, such as benevolent societies, working men’s clubs, and specially authorised societies. Since no new societies can be registered under the 1974 Act, these types of societies generally register under the Co-operative and Community Benefit Societies Act 2014.
We have been asked to review the 1974 Act and the 1992 Act, to ensure that:
- they fit the nature and needs of friendly societies; and
- the regulation is proportionate and predictably certain.
We started work on this project in March 2024. We published a consultation paper setting out our initial thinking, questions, and provisional proposals for reform in March 2025.
The paper discusses a wide variety of issues including:
- how the law can be modernised for friendly societies, including facilitating electronic communication with members, up-to-date rules, and simplified notice periods for meetings;
- how legacy assets should be protected and the demutualisation of friendly societies disincentivised;
- how transfers of business engagements could be made simpler, more efficient and more cost-effective;
- whether and how the challenges associated with permitting friendly societies to raise capital in new ways could be addressed; and
- whether it would be appropriate to remove some of the restrictions on the types of business that friendly societies can undertake.
As part of simplifying the law in this area, the paper also asks whether there is sufficient justification for retaining and updating the 1974 Act, keeping in mind that societies registered under the 1974 Act could re-register with relative ease under the Co-operative and Community Benefit Society Act 2014, or, for registered friendly societies, incorporate under the Friendly Societies Act 1992.
We now seek consultees’ views in response to our questions and provisional proposals. Consultees can respond during the consultation period, which will run until 11 June 2025, through an online questionnaire. The consultation period will be open for 12 weeks after publication of the paper.
Documents (Back to top)
Consultation papers and response forms
Updates (Back to top)
Consultation opened: 12 March 2025
Contact us (Back to top)
Contact us for more information or to be added to our email list.
Email: friendlies@lawcommission.gov.uk
Related work (Back to top)
Read our review of the law relating to co-operatives and community benefit societies.