Credit Unions are a Real Alternative to Banks

Tuesday 23 January 2024

A recent article published by Metro, asks readers that if they have never investigated how a credit union could help their finances, perhaps it is time to take a look.

Speaking to Metro, Robert Kelly, Chief Executive of ABCUL, says that there has been a ‘wrong perception’ in the past that a credit union was a ‘poor man’s bank’. The reality is that’s not the case.

‘Credit unions are offering competitive rates in terms of interest rates for savings and dividends, and there is a really strong sense of cooperation and helping the community as well,’ Robert says. ‘People do deposit savings and get a good return.’

Metro argues it can be hard to compare what credit unions offer, due to most credit unions paying a ‘dividend’ based on the performance of the credit union that year rather than give an interest rate.

The Serve & Protect Credit Union, for members of the fire, health, military, prison and police services, offers a 1.2% regular savings account and a 1% flexible saver with a maximum balance of £20,000, which beats almost anything else on the market.

Robert added that there are moves afoot to modernise credit unions as quickly as possible. ‘We do need to continue with digital transformation.’

Reforms to the Credit Unions Act are due to widening the products that a credit union can offer, which will make them more like traditional banks, so there will be more developments in terms of technology once this happens.

Barriers to innovation and growth remain for credit unions across Britain in the legislative framework in which they must operate and ABCUL was delighted that Economic Secretary to the Treasury John Glen MP announced in March 2020 that the government would bring forward legislation to remove barriers and enable the sector to fulfil its potential.

Source – Metro