Why mutuals may ride out the storm

I believe that businesses and consumers alike should be seeking to tighten their belts in the current economic situation and hold onto some of the more traditional values of prudence and thrift.

In the long term this may herald a new environment of prudence and financial probity which will not only be good for the financial institutions, but will also benefit consumers.

Spending only what can be afforded is not a new idea and its time has come once again. Ultimately, the result of all this could be that the country ends up on a far sounder, and more sustainable, financial footing, through only spending money that you have.

That is not to say that at least one building society that I know is planning to stop its lending, far from it in fact, but the aim will be to ensure that lending volumes in the next couple of years are better suited to a riskier housing market and more volatile funding situation. As a result, while consumers are feeling the pain of rising costs, rising inflation and relatively low wage increases; building societies will continue to offer a safe haven for what spare cash is available.

My advice is simple, savers should think hard before moving their money in the chase for the highest and in some cases frankly amazing rates available and remember the old saying: if something looks too good to be true - it probably is.

Andy Golding is chief executive of the Saffron Building Society