No proportionate legal route to found a new friendly society

Registration under the Friendly Societies Act 1974 closed in 1993, and 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 are legacy institutions, with AFM's 26 friendly society members holding 4.9 million members between them, and essentially none has formed in decades. The Law Commission review, whose consultation closed on 11 June 2025, modernises existing societies, even proposing migrating non-regulated ones onto the 2014 Act, and 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, and 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 and 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 workers lack sick pay, and a workable small-society regime still needs inventing; the closed consultation modernises legacy bodies without opening an entry route.