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In 1810 Henry Duncan, the Church of Scotland minister of Ruthwell in Dumfriesshire, opened a savings bank that took very small deposits from farm labourers and paid them interest. Commercial banks of the time would not handle such tiny sums. The Ruthwell model spread quickly into a savings bank movement, and Parliament gave these banks a legal framework in 1817.
A friendly society turned individual catastrophes such as illness, death and old age into shared, predictable costs. Each member paid a small regular subscription into a common fund, and the fund paid out sick pay, funeral money or a pension to whoever needed it. Members usually met locally and knew each other, so they could check claims and discourage malingering far more cheaply than an outside insurer.
Many early local clubs charged everyone the same subscription regardless of age. The clubs looked solvent while their members were young and healthy. As those members aged together, sickness claims rose faster than income and the fund collapsed, leaving older members without cover just when they needed it. The fix was age-graded contributions based on sickness tables, and large affiliated orders that spread risk across many lodges.
Before public welfare, working people had already organised sick pay, burial insurance, pensions and savings for themselves. When the state did step in, it built on this network: the 1911 National Insurance Act ran health insurance through existing societies as 'approved societies'. Asking what people already do for themselves, before assuming a problem has gone unaddressed, shows the voluntary groundwork that public programmes often take over.