Key announcements for credit unions – Budget 2018
02 Nov 18
This week, the Chancellor of the Exchequer, Phillip Hammond, set out the government’s budget for the year ahead and there was an exciting package of measures announced on credit unions, financial inclusion and affordable credit.
The big news for the sector was the announcement of a pilot prized-linked savings scheme for credit unions designed to boost peoples’ financial resilience through encouraging saving and to raise awareness of the credit union sector. It is based on the US model, Save to Win, and operates in a similar way to Premium Bonds by giving savers the chance to win a prize.
Head of Policy & Communications at ABCUL, Matt Bland commented on this week’s budget, saying: “ABCUL is encouraged by the announcements from the Government in the Budget this week, particularly with the prize-linked savings pilot. Credit unions are all about encouraging people to save and prize-linked savings is an interesting way to encourage savers. The British credit union movement continues to thrive and grow – statistics published by the Bank of England this week stated that between England, Scotland and Wales credit unions serve over 1.2 million people with savings of over £1 billion.
"This initiative will be good for both credit unions and their members; it will provide people with a further incentive to save regularly with their local credit union for planned and unplanned expenses. It sits neatly alongside the Save As You Borrow method already employed by credit unions. ABCUL is working closely with Treasury on the pilot scheme and we look forward to ensuring the best solutions moving forward for the credit union sector.
“It is also pleasing to see the Government reinforce its dedication with the Department of Digital Culture Media & Sport’s (DCMS) £55m fund to capitalise and expand the affordable credit sector. The dormant assets money will help create a new financial inclusion organisation. ABCUL looks forward to working with DCMS to ensure that credit unions are involved in the scheme to maximise its impact in boosting the financial inclusion and capability of the country.
"Evidence from the Lloyds Banking Group Credit Union Development Fund delivered by our sister charity, The Credit Union Foundation, shows that capitalisation of ambitious credit unions can generate many times the investment made in new lending. With the investment of £5 million over 5 years the fund has so far helped 66 credit unions lend over £20 million to their members, with this number set to exceed £25 million with the fifth year’s investments to be made imminently”.