A new FCA development unit and faster approvals headline a regulatory push to help mutuals scale and strengthen
Financial regulators have announced a series of reforms aimed at accelerating the growth of the UK’s mutuals sector, including credit unions, building societies, co-operatives and mutual insurers. The measures — outlined in a joint report from the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) — feature both regulatory changes and new support structures for mutual organisations.
A central initiative is the creation of the FCA Mutual Societies Development Unit, designed to serve as a specialist hub offering guidance, policy insight and support. The unit will help mutuals navigate regulatory changes and will back collaborative projects, such as co-operative networks that strengthen resilience and scale.
Additional proposals include:
- A joint PRA–FCA review of credit union regulations, exploring more risk-sensitive capital requirements for larger, more complex credit unions and proportional approaches for smaller ones.
- Free FCA pre-application support for firms establishing a mutual, updating their business model, or applying for targeted support permission.
- Faster registration for new societies, with application processing times reduced from 15 to 10 working days through the FCA’s Mutuals Society Portal.
- Immediate removal of the Building Societies Sourcebook from the PRA rulebook.
PRA CEO and Bank of England deputy governor Sam Woods said: “Mutuals are a vital part of our financial system. Today’s report examines how the financial mutuals sector is growing, and what we can do to help it thrive in the period ahead.”
The FCA has also released its own assessment of the mutuals landscape. Chief executive Nikhil Rathi highlighted the sector’s diversity and deep community roots: “They support people to buy a home, insure against the worst events, increase financial inclusion and bring communities together… We want to help them grow, and our new Development Unit will provide dedicated support. We’re also making it faster for mutuals to start-up.”
Economic Secretary to the Treasury Lucy Rigby welcomed the regulatory moves, noting the government’s commitment to doubling the size of the mutuals sector: “Mutuals form an important part of the UK’s financial and business landscape, supporting the savings, borrowing, pensions and more of millions of people.”
The announcements build on existing regulatory initiatives, including:
- Proposals to simplify the Senior Managers and Certification Regime
- The creation of the Scale-up Unit for high-growth firms
- The PRA’s Strong and Simple capital rules for smaller institutions
- The rollout of Solvency UK, reducing administrative burdens for insurers
FCA-led mortgage market reforms adopted by 85% of lenders, including building societies, enabling them to offer around £30,000 more in lending capacity
Mutuals—owned by and run for their members—serve over 30 million people in the UK, including 93 mutual insurers, 42 building societies and 350 credit unions. Beyond financial mutuals, the UK has more than 8,400 co-operative and community benefit societies, representing 12 million memberships and holding assets worth over £223bn across housing associations, retail societies and social clubs.
The reports were unveiled at an FCA–PRA event in Rochdale on 5 December, attended by Economic Secretary Lucy Rigby MP.
