What’s in a Name - Bank or Building Society?

Almost half of people in the UK are confused about the difference between a bank and a building society, according to new data.

Banks operate for profit and their shareholders whilst building societies are owned by those with money invested in them yet 48 per cent of people are unaware of this, according to research from Stafford Railway Building Society.

Those living in London, the Midlands and the south-west are most likely to be able to tell their banks from their building societies but the Welsh prove to be more sketchy on the details with 86 per cent not knowing what a building society is.

A further 57 per cent of the two-and-a-half million people in the UK have a mortgage with a building society did not realise this was any different to one arranged through a bank.

Mike Heenan, chief executive of Stafford Railway Building Society said the changing faces of financial institutions in recent years have proved confusing to many.

"Most people in our survey still thought of the Halifax as a building society when it is in fact a bank. One could flippantly say, what's in a name but the fact is banks and building societies operate in a totally different way," said Mr Heenan.

"For many people, a mortgage is the biggest financial commitment they will undertake. With evidence of such poor knowledge, many borrowers are not going to explore the options available and decide upon the best mortgage for their needs," he added.