The UK population missed out on an additional £20bn in 2023 by keeping their savings with a high street bank rather than a building society, Yorkshire Building Society has found.

The society’s research showed that 55% of people have their main savings account with a traditional bank, compared to 23% who use a building society. The loss of saving with a bank works out at an extra £547 for each person in the UK.

Over the course of 2023, the mutual paid an average savings rate of 3.43%, which is 41% higher than the market average.

The Yorkshire also revealed that 57% of people have a mortgage with a bank, compared to 36% who chose a building society.

This gap was wider for younger generations (18-34 years old), with 32% and 63% choosing to have a mortgage with a building society and a bank, respectively.

Despite the preference for banks, building societies were perceived "more positively", with 36% of respondents stating that they are more trustworthy and reliable, compared to 32% who believe the same statement in regard to banks.

The Yorkshire said that one explanation for customers continuing to choose bank may be that there is "poor understanding of what makes building societies different, especially among younger people". Building societies are mutuals, which means they are owned by their members and reinvest profits in their interest, rather than paying out to external shareholders.

Interim chief commercial officer at Yorkshire Building Society, Tom Simpson, said: "Building societies are punching above our weight in many ways – we’re paying more in interest and we’re doing more to help people buy homes.

"There is a lot of competition out there, with new banks and financial technology companies emerging all the time. Yorkshire Building Society has been around for 160 years and we want to share the story of our commitment to our members and our communities with even more people, especially younger generations."

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