Credit Unions – an ‘oasis’

 

elaine moore ftAn article by Elaine Moore, deputy editor of FT Money, opened by reporting a plan by the All-Party Parliamentary Group on Financial Education for Young People to invite high street banks into British schools to help to teach financial education.

A Coventry reader has suggested that representatives of credit unions would offer a better education to the young

These member-owned financial co-operatives are democratically controlled by members, promoting thrift and providing credit at competitive rates. They’ve been around since the 1940s but in recent years have become increasingly popular among both savers and borrowers.

Moneysaving Expert explains that credit unions aim to help people to take control of their money by encouraging them to save what they can afford and later to borrow only what they can afford to repay.

These small non-profit organisations are set up by members with something in common: living in the same town, working in the same industry or belonging to a particular trade union.

Credit union regulations prevent them from lending out of all their members’ savings (or create money like the private banks) and speculating. All money in savings unions has the same Government protection as bank savings accounts under the Financial Services Compensation Scheme.

Norris Green Liverpool credit_union 4000 members

 There are 500 or so credit unions in the UK offering loans, savings and current accounts to over 900,000 adults and over 100,000 junior savers. Norris Green Community Credit Union in Liverpool (above) was set up in 1999 and now has 4000 members. They help those who can’t get access to ordinary bank products, providing a lifeline in less well-off communities for folks and a welcome alternative to payday loans or doorstep lending. Moreover, from 2012 credit union membership was opened to organisations.

Those who want to bank ethically and benefit their community also join credit unions and some larger credit unions, such as the police union or the big Glasgow credit union, offer better products than mainstream finance.

abculThose who want to find their local website may go to ABCUL’s Find Your Credit Union website and search by postcode, employment type, or other organisations that you think may have a union, or call Abcul on 0800 015 3060.

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