Simon Read: A million reasons why mutuals are important

  • @simonnread

Next Thursday a Yorkshire-based mutual will launch a £1m foundation for the exclusive benefit of its customers and their communities.

Engage Mutual offers life insurance policies and savings schemes to about 500,000 people. But it hopes the new Foundation will help to underline the importance of mutuals to their members, as well as actually helping them.

Some of the cash will be used to help mutual members who need a financial helping hand. Customers will be able to apply for personal grants of up to £500 to help themselves or a family member.

Such a grant might, in cases of hardship, be used to replace a much-needed broken washing machine, fix a leaky roof or assist with school uniform costs. It might even be used to be the catalyst that gives someone a career kick-start by helping them learn a new skill, or gain a qualification.

However, the bulk of the Foundation's money will be used to help communities. It will provide £25,000 each for two community projects and £5,000 each for 15 smaller projects every year for five years.

Customers will be asked to play an integral role in its running by nominating and then choosing how best to spend the £1m for the benefit of themselves and their communities.

When I met Peter Burrows, the mutual's chief executive, this week, he said: "Being part of a mutual should be about the benefits of belonging. We are sharing our success as a mutual with our customers."

The scheme isn't the first of its kind, but is a great example of a mutual benefiting customers, not just using them to boost profits, as banks tend to.

Twitter: @simonnread