No proportionate legal route to found a new friendly society

Registration under the Friendly Societies Act 1974 closed in 1993; the 1992 Act route is built around insurance business requiring FSMA authorisation, disproportionate for a small mutual sick-pay or benefit club. The surviving societies (AFM's 26 friendly society members hold 4.9m members) are all legacy institutions; essentially none has formed in decades. The Law Commission review (consultation closed 11 June 2025) modernises existing societies, even proposing migrating non-regulated ones onto the 2014 Act, but creates no proportionate entry route for new mutual-aid societies.

Payments, membership and actuarial software now make running a 500-member income-pooling club operationally trivial; UK law makes it practically impossible without becoming a regulated insurer. Millions of self-employed workers lack sick pay. The organisational form that built British welfare before the state is closed to new entrants.

A 'small benefit society' regime in the government response to the Law Commission report: registration-only status for discretionary-benefit societies below defined size/benefit thresholds, plus clear FCA perimeter guidance distinguishing discretionary mutual aid from contractual insurance.

// State-led: Instrument: small-benefit-society regime via government response to the Law Commission, plus FCA perimeter guidance.

Millions of self-employed lack sick pay, but a workable small-society regime still needs inventing; the closed Law Commission consultation modernises legacy bodies without opening any entry route.