Category Archives: Association of British Credit Unions

Local banking still very much alive in Scotland

ABCUL Scotland dev stage03Following the sad news that Airdrie Savings Bank is to close, the Association of British Credit Unions Limited (ABCUL) has pointed to Scotland’s thriving credit union sector as evidence that local banking is still very much alive and well.

ABCUL Chief Executive Mark Lyonette said: “Across Scotland, almost 100 credit unions are providing savings accounts and affordable loans to more than 387,000 people. Last year, the sector’s deposits, lending and assets all grew by 8%, and Scotland has the fourth highest level of credit union membership in Europe.

“Of course, credit unions must keep pace with what consumers expect from their financial service providers, which increasingly means instant access and control of our money via mobile devices.

“For smaller players like credit unions, the infrastructure to deliver this is often out of reach unless we act together to achieve the required scale. That’s why a number of credit unions in Scotland and across Britain are working co-operatively to develop and deliver the products, services and access channels that modern consumers expect.

“This way, credit unions can ensure a competitive, sustainable local banking option is always open to Scottish consumers as part of a healthy, diverse financial services sector.”

The latest figures from the Bank of England (as at 30 June 2016) show there are 99 credit unions in Scotland serving more than 387,000 people, including 56,000 junior savers. Credit union members have savings worth £484 million and are borrowing £296 million, often at lower interest rates than are available for the same loan from other lenders. The Scottish credit union sector’s assets are worth £562 million.

With 7.2% of the Scottish population using a credit union, Scotland has the fourth highest level of credit union membership in Europe, after only the Republic of Ireland, Northern Ireland and Poland.

Credit unions know how to help to save


ABCUL Scotland logoFollowing the Prime Minister’s announcement of the Government’s “Help to Save” policy, Chief Executive of the Association of British Credit Unions Mark Lyonette said:

“Credit unions are all about promoting financial wellbeing and good money habits, so we welcome the Government’s new Help to Save scheme.

“Credit unions have years of experience helping people to save and make the most of their money – whether by working with employers to let staff save direct from payroll, letting people tuck away savings alongside their loan repayments, or helping people plan and afford expenses like Christmas, weddings and holidays – so many credit unions will be keen to provide the new Help to Save accounts.”

Scottish Government backs call for workplace savings

ABCUL Scotland logo ABCUL – the Association of British Credit Unions Limited – has welcomed the Scottish Government’s backing in its campaign to make access to credit union savings and loans a standard workplace benefit.

A new report – “Scotland’s Credit Unions: Investing in our Future” – published on 10 February outlines the Scottish Government’s support for making payroll deduction partnerships between employers and credit unions as popular in Scotland as it is in other countries like the United States.

ABCUL Chief Executive Mark Lyonette said: “It’s no coincidence that the world’s most successful credit union movements have close links with employers, making saving and repaying affordable loans really easy for people via payroll deduction.

“We’re delighted that the Scottish Government has responded to our call to make access to credit unions a standard workplace benefit, and we look forward to Scotland becoming a Credit Union Nation where employees, businesses and the wider economy all benefit from a more financially healthy population.”

The First Minister of Scotland Rt Hon Nicola Sturgeon MSP has written a letter to employers highlighting the benefits of working with credit unions.

Nicola Sturgeon writes: “The Scottish Government recognises the valuable role played by credit unions in building financial health by providing financial services and products to a wide range of customers.

“So I am urging employers across Scotland to get in touch with a credit union to explore establishing a payroll deduction relationship with a view to improving financial health and boosting the productivity of Scotland’s businesses.”

There are over 100 credit unions in Scotland serving 375,000 people who are saving £454 million and borrowing £276 million.

The Scottish Government report can be read here: http://www.gov.scot/Publications/2016/02/4045/0

 

Credit unions join forces to serve military personnel

The Ministry of Defence has made it possible for three of the UK’s leading credit unions to join forces and make simple savings accounts and loans available to the Armed Forces and their families.

Johnson Beharry VC joining London Mutual Credit Union

Johnson Beharry VC joining London Mutual Credit Union

The arrangement means that Armed Forces personnel will be able to save regularly or repay loans with a credit union via payroll deduction. Family members and retired personnel in receipt of a pension are also eligible to join.

The launch of this service is being marked with a celebration at the head office of the Royal British Legion in London on Thursday 15 October, which is International Credit Union Day.

A new website – www.joiningforcescu.co.uk – is also being launched with details of the services offered to Armed Forces personnel by the three credit unions and links to join.

Over the years, Armed Forces personnel have reported difficulties accessing credit because their job involves moving regularly and it can be challenging to build a good credit rating. For this reason, some personnel have reported being actively targeted by high cost lenders.

The appetite to facilitate regular saving and affordable borrowing for Forces personnel saw the Government exploring payroll deduction partnerships with credit unions, and following an application process, three of Britain’s largest and most successful credit unions – Plane Saver Credit Union, Police Credit Union and London Mutual Credit Union – have been selected to offer this service to Forces personnel.

Police Credit Union Chief Executive Peter Evans said: “The three credit unions are honoured to offer our services to Armed Forces personnel, and it is a great example of credit unions working co-operatively with each other and with the Ministry of Defence to deliver a service to the men and women of the Armed Forces.

“Joining a credit union gives military personnel access to regular savings and affordable credit with a financial services provider that understands their job and their lifestyle. Our credit unions can help them stay on top of their finances and steer clear of high cost lenders.”

Minister for Defence Personnel and Veterans Mark Lancaster MP said: “I’m delighted that credit union services will today be available to Armed Forces personnel. It is crucial that those service people who work so hard to keep Britain safe, both at home and abroad, can access easy and affordable ways to save and borrow.

“This helps to tackle an issue that has caused disadvantage and disappointment to some service members.”

One of the first people to join a credit union under the new arrangement is Lance Sergeant Johnson Beharry VC. Lance Sergeant Beharry – who became the first living recipient of the Victoria Cross since 1969 for saving the lives of his comrades in Iraq – has joined London Mutual Credit Union.

Johnson Beharry VC said: “I am pleased to join London Mutual Credit Union and I look forward to spreading the word about this new scheme for military personnel. It is often difficult for people in the Armed Forces to gain access to financial services, especially those serving overseas who have little or no way of getting credit in the UK. By joining a credit union, Armed Forces personnel will be able to access affordable loans when they need them and to plan for the future by saving directly from their pay packets through payroll deduction.”

Internationally, credit unions have a proven record of providing services to Armed Forces personnel. The largest credit union in the world, Navy Federal Credit Union, has offered savings, loans and a range of financial products to members of the United States Armed Forces and their families since 1933. Today, the credit union has around 5.7 million members across America and assets of $70 billion.

Stay up to date with all the very latest news via www.twitter.com/JoiningForcesCU.

Lloyds backs credit unions with a £4 million package of support

ABCUL logoMatt Young, Group Corporate Affairs Director for Lloyds Banking Group, used an All Party Parliamentary Group on Credit Unions reception on Monday at Westminster, marking the 50th anniversary of credit unions in Britain, to define a four year plan for the Group’s £4 million investment in credit unions.

Discussing the £4m support package, Matt said: “Our overall aim is very simple. We want to enable as many people as possible to access and benefit from financial services. We see this as a key part of being a responsible business and helping Britain to prosper.”

Welcoming Lloyds support in the area of financial inclusion, the Economic Secretary, Andrea Leadsom, said: “Lloyds’ support will be a welcome boost to the efforts of the credit union movement to serve even more people in their communities.”

The Credit Union Growth Plan, (the Plan), has four separate elements, and draws on some of the ways that the Group already uses to support and help grow small businesses.

  1. Launch of a £4m fund which – over four years – will assist credit unions who can demonstrate strong and viable proposals for growth. Delivered in partnership with the credit union Foundation, the fund will focus on strengthening the financial position of credit unions, enabling them to grow sustainably, build resilience and help more people in the long term.
  2. Signposting more customers to credit unions. The Group has already piloted this approach from its branches with the Leeds City Credit Union for six months and saw around 2,000 Lloyds’ customers take away information about the credit union. It is now scaling up in other parts of the country – initially working with credit unions in up to 20 locations close to employment hubs; strengthen local relationships by increasing the mentoring and support of its colleagues.
  3. Shared expertise – seconding two full time colleagues to work on the credit union Expansion Project, enabling the whole credit union sector to scale and serve more people.
  4. Collaboration / testing new approaches – it is for this reason that the Group is financing the pilot stage of the Archbishop of Canterbury’s Church Credit Champions Network which will train at least 300 Credit Champions and generate at least 3,000 addition members of credit unions.

Mark Lyonette, Chief Executive of ABCUL, the Association of British Credit Unions Ltd, said: “As is demonstrated in countries like the US and Canada where more than 40% of people use credit unions, the British sector has great potential to provide an ethical financial option and provide healthy competition in financial services. This can be through providing an affordable and responsible alternative to payday and other high cost lenders or providing great value loans and savings without the need to pay a return to shareholders.

“The sector’s success depends upon its ability to develop an efficient and sustainable business model which is able to meet the needs of people from a range of backgrounds. This is what the DWP-funded Credit Union Expansion Project seeks to do and the Lloyds investment announced today will give this effort a further boost by accelerating sustainable growth and sharing key expertise and knowledge.”

Credit unions welcome new bankruptcy legislation in Scotland

ABCUL – the AssoABCUL logociation of British Credit Unions – has welcomed the passing of the Bankruptcy and Debt Advice (Scotland) Bill in the Scottish Parliament today (20 March).

The Bill – which aims to deliver a debt advice, debt management and debt relief service which is fairer to creditors and debtors alike – was passed with cross-party support at the end of a long process of consultation which Scotland’s credit unions have closely engaged with throughout.

Credit unions particularly welcome the adoption of a single common financial tool to calculate debtors’ contributions, the extension of money advice and financial education, and measures to curb the potential for unfair and inappropriate use of debt relief products.

The creation of a Financial Health Service to support people with debt problems and build financial capability across the country more widely has also been welcomed by Scotland’s credit unions.

ABCUL Scotland Policy and Relations Manager Frank McKillop said: “A credit union loan comes from other people’s savings, so the principle that people who can repay do repay is especially important to credit unions.

“We welcome the measures in this Bill which should ensure a fairer deal for creditors like credit unions, and we look forward to working with the new Financial Health Service to play our part as a safe place to save and an ethical source of affordable loans to help people from all walks of life keep in control of their finances.”

Credit Union News published

The latest edition of Credit Union News, which we have been working on for our client ABCUL, has been published. This special edition celebrates the 50th Anniversary of credit unions in Britain.

Credit Union News - March 2014

Credit Union News – March 2014

The first two credit unions – Wimbledon Credit Union and Hornsey Co-operative Credit Union – both started in April 1964, and the magazine includes an interview with two of the founder members of Hornsey Co-operative Credit Union. There is a timeline showing how the credit union sector in Britain has developed over the last 50 years and an interview with credit union activist Martin Logan, who has played a key role in helping to record the history of credit unions in this country.

There is also a look ahead to the future, with a feature on some of the “new kids on the block”: Polish Credit Union UK, Churches Mutual Credit Union and Retail Credit Union are three new credit unions taking the sector forward.

The magazine goes out to ABCUL members and many others with an interest in the credit union sector and is published three times a year. A copy of the latest issue can be downloaded from our publications page.

Credit unions welcome £1 million a year commitment from Lloyds Banking Group

ABCUL logo

ABCUL welcomes Lloyds Banking Group support for credit unions.

Lloyds Banking Group has re-emphasised its commitment to providing leadership in the area of financial inclusion by announcing its intention to provide £1 million per year to credit unions. It has also committed to support 1 in every 4 of Britain’s social banking customers.

This announcement falls during the week the Group revealed its full Helping Britain Prosper Plan where, for the first time, it revealed seven separate and significant public commitments to address some of the big issues facing Britain today.

Graham Lindsay, Director, Responsible Business for Lloyds Banking Group said: “Our Helping Britain Prosper Plan incorporates bold, public commitments to help address some of the big issues facing Britain today. It’s about putting customers and communities at the heart of everything we do. The Plan is not just for those customers enjoying relative prosperity, but also those facing financial difficulties. For this reason we believe our annual investment of £1m into Credit Unions is one of our most critical.”

Mark Lyonette, Chief Executive of the Association of British Credit Unions (ABCUL) said, “We very much welcome the package of support for the credit union sector as announced today by Lloyds Banking Group. We look forward to working with the Group to ensure this generous investment complements the work that is already taking place to strengthen the sector. The Credit Union Expansion Project will benefit greatly from the secondment of Lloyds’ experts and the expansion of the signposting scheme should help many more people access appropriate services from their local credit union.”

Minister for Welfare Reform Lord Freud said: “Credit unions play a vital role in helping people build up savings and have access to loans, especially those who find it difficult to have mainstream high street bank accounts. This is why we are investing £38m to help credit unions modernise and grow.

“I absolutely welcome this support from Lloyds for extra funding and I particularly welcome the commitment to send experienced banking staff to support the growing efficiency of credit unions. I hope other banks will also consider this and provide support to help local credit unions.”

Lloyds Banking Group commenced a pilot in September 2013 through 25 Lloyds and Halifax branches in the Leeds area to signpost appropriate customers to the Leeds City Credit Union and local money management charities. Over 1,000 customers to date have taken away information about these organisations.

The approach of the pilot programme, which was due to end this month, has been adopted on a permanent basis and will be expanded to a further nine UK flagship locations with the cascade of basic information becoming available through all Lloyds and Halifax branches.

Chris Smyth, Chief Executive, Leeds City Credit Union, said: “Credit Unions play a critical role. We know this from our pre-Christmas trading and coinciding with the Lloyds pilot, was 25% higher than the prior year. In this period our lending was almost £2m. This represents a terrific saving in terms of interest of £1.3m had these loans gone to a high cost lender instead.

“Our post Christmas trading during January and February is 100% up on the same period last year. We believe this is an exceptional turnaround and may indicate a serious shift in mood across our target market towards the credit union – which is great news for all.”

Lloyds Banking Group is Britain’s biggest provider of social bank accounts.

Latest issue of Credit Union News

Credit Union News - December 2013

Credit Union News – December 2013

The latest issue of Credit Union News, which Ethos public relations has been working on for our client ABCUL, has now been published.

The magazine, which goes out to ABCUL members and many others with an interest in the sector, is published three times a year. In this issue, there is an interview with Sue Lewis, Chair of the Financial Services Consumer Panel, who explains what the panel does and her views on credit unions and the financial services market.

There is a look back at all the celebrations which took place on International Credit Union Day on 17 October, when over 40 bishops got involved with their local credit union. There is also a feature on the links between credit unions and trade unions and the important role that trade unions have played in helping to set up and run credit unions.

A copy of the latest issue can be downloaded from our publications page.

MPs put their money where their mouth is

Parliamentary LMCU logostaff, including MPs, can pay into a credit union via payroll deduction, thanks to a new service launched on Monday 25th November.

Agreements with the Parliamentary authorities mean that anyone working in the Palace of Westminster can now join London Mutual Credit Union and save or repay loans direct from their wages.

The initiative was launched at an event in Parliament hosted by the All-Party Parliamentary Group on Credit Unions and London Mutual Credit Union. Money saving expert Martin Lewis spoke at the launch and also became a member of the credit union.

Credit union partnerships are a cost effective way for employers to enhance the financial well being of employees and payroll deduction makes saving and borrowing easy and convenient. The Parliamentary authorities are the latest in a long list of employers to offer this benefit to their employees. Staff working for the police force, public transport employers, British Airways and the NHS are just some of the people who already enjoy the convenience of payroll deduction.

Martin Lewis said: “With the growth scourge of payday lending across the UK – credit unions are a viable, cheaper, non-profit local alternative and should be encouraged. Therefore today I hope to be excited at the launch event to see senior MPs and even Government Ministers giving the London Mutual their backing by joining up and making use of the deduction facility. It’ll be interesting to see who puts their money where their mouth is.

“This extra income for the credit union can then be lent back out to the community as affordable loans, stopping the need for many to resort to the use of high-cost credit and demonstrating the benefit to both sides of the financial equation of becoming a member.”

Damian Hinds MP, Chair of the All-Party Parliamentary Group on Credit Unions, said: “I am delighted to see London Mutual Credit Union extend its services to all of those working in and around Parliament. Partnering with employers and payroll deduction arrangements can have enormous benefits for credit union development while providing a valuable financial service to workers and employers.”

Lord Kennedy of Southwark, a Vice Chair of the APPG on Credit Unions, said: “In extending to Parliamentarians and Parliamentary staff, London Mutual will ensure that even more people can benefit from their excellent, affordable and ethical services both in Parliament and in the wider community. And I hope that in making personal use of London Mutual, many more MPs will be persuaded of the great value that credit unions generate for their members and society.”

Lucky Chandrasekera, London Mutual Credit Union chief executive, said: “It is fantastic to be launching our Parliamentary service today which is a goal we set ourselves some years ago. We hope by launching this service for Parliament that we can demonstrate the value of credit union membership on a daily basis to MPs and the wider Parliamentary staff. We have a range of competitive products and services for Parliament to take advantage of.”

ABCUL Chief Executive Mark Lyonette said: “The value of payroll deduction is not to be underestimated for all parties concerned. This high profile addition to employers offering this service is very welcome. The vast majority of large employers in the US – including the White House, Congress and Senate – offer this facility to their staff and I hope that many more will follow this example and talk to their local credit union about how they can help their employees access convenient financial services through payroll.”

Credit unions are financial co-operatives, owned by their members, which provide safe savings, affordable loans and a range of other financial services to over a million people in Britain.

London Mutual Credit Union is the largest community credit union in London. It serves over 20,000 members in the London Boroughs of Southwark, Lambeth, Westminster and Camden. Members have access to a range of savings and loan products, including the Credit Union Current Account and a cash ISA offering 3% AER.