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Friendly Societies (sometimes called mutual benefit societies, benevolent societies or fraternal organisations) are mutual organisations which exist to provide financial support to their members when in hardship. The predecessors of the modern Friendly Societies developed in the seventeenth century, and by the early twentieth century they are estimated to have had around 9.5 million members in the United Kingdom. Friendly Societies were a significant source of financial support for the working class before the development of the Welfare State. For example, in the city of Bristol the sickness and death benefits paid to members by Friendly Societies in the early 1870s exceeded the amount spent on the poor by the city council by more than a third.

Origins

Many Friendly Societies were based on and served a small geographical area, perhaps a single village. Others provided for members of a particular trade.

Financial support

The principal financial role of Friendly Societies was to provide financial support for members who were sick or out of work, for the families of members who had died or to pay for a respectable funeral. Membership fees were in the order of few pence per week, which would entitle the member to a sickness benefit of perhaps 8 or 10 shillings a week, medical care from a doctor and, should he die, £10 to pay for a funeral. Other benefits that a member might receive, depending on the society, included marriage grants and pensions.

The funds for these benefits came from the subscription fees paid by the members, either directly or following investment. However the relatively small size of many societies meant that building up and maintaining sufficient funds to pay benefits - especially if too many members fell ill or lost their employment - could be difficult; many early Friendly Societies failed for lack of funds. These difficulties were gradually resolved, partly by improved managemment and methods for calculating the actuarial risk, and partly through societies coming together to form wider federations, thus allowing for greater risk pooling.