National Press Highlights People Turning to Credit Unions to Fix Financial Problems

Thursday 25 January 2024

A recent story published in Metro, has highlighted people turning to the credit union sector in desperate need of support.

Between 2011 and 2020, the credit union sector saw an increase in membership by 41% and loans by 71%. The average assets per union have more than quadrupled from £1.7million in 2010 to £8.1million in 2020.

‘We see many people coming to us in a desperate position, drowning in unaffordable debt. Many of these families are facing a tough year with energy prices rising steeply and National Insurance increasing too,” says Matt Bland, Chief Executive Officer of the Co-op Credit Union.

Speaking to Metro, Victoria, a 35-year-old IT contractor from Saddleworth, says: ‘I was working as a call centre handler on around £10,500 a year. I didn’t have any money to go out one night, and a friend told me that I could do this thing called Wonga [a payday loan company that collapsed in 2018], where you get the cash and just pay it back on payday.

“ I kept doing it, borrowing more each month. It got to the point where I couldn’t get to work because I couldn’t afford the tram fare, so I had to take out another loan. It spiralled out of control.” By this point, Victoria stopped going out and seeing her friends. All she could think about was the debt. Not knowing where to turn, Victoria contacted the Co-op Credit Union in Manchester. The advice and support she received there changed her life. She was given £1,000 with rates so low that she could repay the whole amount over a year, and she still relies on the lessons she learnt from the union about planning and budgeting. She has owned her own house for five years now.

Matt Bland added: “Almost all of the people we lend to have some kind of debt already. I’d say perhaps a third have some kind of high-cost agreement be that a pay day loan, a high cost credit card, a home credit agreement or a pawnbroking arrangement. We offer affordable loans and savings accounts, including loans to consolidate debt and help you out of a hole.”

For years, Kirsty Ferguson, a hardworking mum-of-two from Bradford had always budgeted well and paid her bills on time.

However, when the pandemic hit, Kirsty found herself furloughed, in debt and worrying about money again. Kirsty turned to the Bradford District Credit Union for help. They gave her a low-interest Covid loan of £500 – which included a £50 gift. She paid off her debts overnight and got her finances back in order. “It’s a massive relief,’ she admits. ’The freedom I have to choose what I do with my finances now. We can go on holiday. We can go away without freaking out. I can live my life.”

Kirsty still saves at Bradford District Credit Union today. “I love them,” she says with a smile. “They are human, accessible. I love knowing that my savings are going to help other people. Who knows where your money goes when it’s in a bank? Who wants their savings to line a fat cat’s pocket? If you save with a credit union, you know you’re helping your local community.”

“My advice to anyone struggling is – don’t go to loan sharks, don’t go to payment stores, don’t do a payday loan – go and talk to someone at a credit union. They have never judged me, they have always helped me. They’re not there to get money out of me, they are just there to support me and my family.”

Source – Metro