Simple savings, sensible loans
Our There for You credit union service offers UNISON members access to low-interest loans and a range of savings products through our UK network of partner credit unions. Whether you’re dissatisfied with current banking arrangements, are struggling with exorbitant interest rates charged by payday and other lenders or simply looking for an ethical alternative, credit unions may provide just the solution.
UNISON has established a network of credit unions covering the UK where members and their families can both save and take out low-interest loans – in many cases, through payroll deductions.
We already know just how many members are using payday loans and other high-interest loan products – often getting caught in a trap of spiralling debt. UNISON is promoting credit unions as financial and ethical co-operatives that will serve members in a safe and responsible way and promote financial wellbeing.
The benefits for UNISON members
1. Saving with a credit union
As little as £1 may be all you need to open a savings account. This could be a sensible option if you can only afford to save a small amount each week or every now and then. And your reward for saving will be that you receive a dividend each year – often in the region of 2-3% of the amount you have saved.
2. Borrowing from a credit union
Our credit union partners can offer loan products – including emergency loans – to members who do not necessarily meet the criteria to borrow from high street lenders such as banks and building societies, many of which have tightened their lending criteria as a consequence of the credit crunch. Loans come with no hidden charges and no penalties for early repayment.
Is a credit union right for me?
Joining a credit union could be for you if you are interested in being part of a democratically-led organisation that:
- is for people and not for profit;
- serves its members first and foremost;
- appeals to anyone wanting to support their local community and economy;
- is committed to helping its members improve their financial situation;
- offers fairly-priced loans including to people with imperfect, limited or no credit history;
- offers a broader range of savings and loan products than many other lenders;
- understands the differing banking needs that reflect a wide range of income groups;
- is appropriately regulated – so is a safe place to save.
How do I join a credit union?
Some credit unions are based on where you live or work and others, such as police credit unions, on the job you do.
UNISON has established a network of credit unions covering the UK where members and their families can both save and take out low interest loans, in many cases through payroll deductions
A directory of credit unions across the country, organised by region
In debt or financial difficulty?
If you’re finding it difficult to repay existing debt, contact UNISON Debtline for advice on managing it before taking on any additional debt.
Call UNISON Debtline
Freephone 0800 389 3302.
Available 24 hours a day, 7 days a week.
If you’re experiencing hardship due to an unexpected change in your circumstances, such as a relationship breakdown or ill-health, you may be eligible for financial assistance.
Call There for You
020 7121 5620
Available between 9am – 5pm
Monday to Friday
Are credit unions regulated?
Credit unions are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.
Can a branch conduct its banking through the credit union?
No. UNISON recommends that branches bank with Unity Trust.
Can a credit union refuse my application if I owe money elsewhere, such as a bank overdraft or credit card debt?
Not necessarily – contact your UNISON-endorsed credit union for details. Many credit unions offer ‘basic’ bank accounting, whereas most commercial banks have now withdrawn this service.
Can I conduct my banking online with a credit union?
This will depend on the type and size of individual credit unions. Some credit unions allow you to transfer money to other accounts online or send money abroad.
Visit our directory to find out more.
Can I pay my bills via a credit union?
This will depend on the type and size of individual credit unions. Contact your local or employer-linked credit union for full details.
Most credit unions offer budgeting accounts that can help in managing personal finances.
Visit our directory for more information about individual credit unions.
Do credit unions offer bank accounts?
This will depend on the type and size of individual credit unions.
Visit our directory for more information.
Give me three good reasons for joining a credit union?
1. Credit unions typically have lower operating costs than other financial organisations and their dividends are often higher than interest paid on bank savings accounts. In addition, rates of interest charged on loans are significantly lower than those offered by banks and particularly doorstep or payday loan companies.
2. Any profit earned can be used for the benefit of members and not external shareholders, making this particularly attractive in the light of the excesses of bank executive bonuses.
3. UNISON is only working with credit unions that are authorised and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. So in the unlikely event that a credit union fails, the Financial Compensation Scheme will pay any financial loss up to £85,000. They also provide a mechanism for resolving any disputes (should they arise) between UNSION members and their chosen credit union.
How are credit unions addressing the rise in payday lending?
Credit unions aim to educate members in responsible lending options and are not necessarily trying to offer like-for-like comparative products that payday lenders provide.
However, in response to the prevalence of payday lenders, many credit unions have introduced new products that can meet an urgent need.
The difference in rates is obvious and credit union members are able to compare the wide difference in interest rates and true cost.
How can I find my nearest credit union?
Our directory lists all the approved credit union partners with whom we are working closely. You’ll be able to find the most relevant credit union for you within our network.
How can I get involved with my credit union?
Whether you can spare an hour a week or even more – there are many ways to get involved.
Credit unions are primarily run by the members for the members, and becoming a volunteer means you can:
- use and develop your skills;
- access training;
- give something back to your community;
- be part of the management committee.
Contact your local credit union to find out about relevant volunteering opportunities or email us.
How can UNISON branches get involved in promoting their local credit union?
This can be done in a variety of ways, such as:
- displaying posters;
- registering UNISON members with their credit union;
- organising workplace presentations;
- articles in branch newsletters.
We are putting together a range of resource materials. If you would like further information, help to arrange a workplace visit or advice on negotiating a credit union payroll deduction scheme with your employer, contact us.
How much can I borrow?
The amount you can borrow will vary from credit union to credit union.
Some will require you to be in a savings scheme for anything up to 12 weeks before being eligible for a loan, while others will offer an instant loan – again, this will be subject to circumstances. As responsible lenders, credit unions generally encourage saving alongside any borrowing.
How straightforward is it to get a loan from a credit union?
You will need to be a member. Many are free to join, although some may apply a nominal charge, which is usually no more than £5.
Once you have completed a loan application form, this will be assessed by your credit union for affordability. While there is a form of credit scoring, this in itself is not necessarily the sole deciding factor.
Unlike mainstream banks, credit unions are more flexible and will look at individual circumstances, affordability and whether there is a payroll-deduction scheme in place with your employer.
Generally, loan applications are decided very quickly.
I’m already in debt. Should I take out another loan?
It would be useful to contact your credit union to discuss options and affordability.
Ultimately, the decision rests with the individual in terms of what is responsible borrowing and the ability to repay debts.
However, UNISON members have their own debt advice service, UNISON Debtline, and we would encourage anyone struggling with debt to seek help on managing these before committing to another line of borrowing.
I’m worried how I will cope with changes to my benefit payments. Can credit unions help?
Many credit unions are developing new budgeting products in response to the impact welfare reforms.
Visit our directory for more information.
Is my money safe with a credit union?
Eligible deposits are covered up to £85,000.
To find out more visit the Financial Services Compensation Scheme website.
Should I be concerned about agreeing to payroll deductions?
Absolutely not – all credit unions are covered by the Financial Services Compensation Scheme.
Eligible deposits are covered up to £85,000.
Visit the Financial Services Compensation Scheme website.
What if I have a credit union loan and have difficulty repaying the debt?
Contact the credit union in the first instance to discuss options. The quicker you do this, the more options the credit union will have to consider.
If you are already in debt and worried about finances, then we would suggest contacting UNISON Debtline in the first instance for free and impartial advice about the options that are open to you.
UNISON Debtline – Freephone 0800 389 3302 (24 hours, 7 days a week)
If recent events are making life financially difficult, it may be more appropriate for you to make a request for financial help through UNISON There for You.
Contact There for You on 020 7121 5620 or email email@example.com
What is a credit union?
A credit union’s customers are its members. Credit unions can only offer services to these members. This is because credit unions are co-operatives – self-help organisations owned and democratically controlled by their members.
Credit unions have a number of clear objectives enshrined in their constitution. These rules are:
- promoting thrift – members must be encouraged to save as well as borrow;
- providing credit and loan products with fair and reasonable interest rates;
- the efficient use and control of members’ savings for mutual benefit in order to earn a rate of return (the dividend);
- training members to use money wisely, devise a budget and manage their financial affairs;
- members own and control their credit unions;
- because credit unions are co-operatives, members have a say in how the credit union is run and the directors are elected from the members, by the members, to represent their interests;
- credit unions serve the community. So when you invest in your local credit union, you know it’s your neighbours or colleagues who are benefiting – not outside shareholders.
What services do credit unions provide?
This depends on the type and size of the individual credit unions, but generally includes:
- current accounts;
- savings accounts – credit union members are encouraged to build up their assets and accumulate savings. From any amount, no matter how small and whether for the short or long term, a range of accounts – for instance, Christmas savers, funeral savings plan -budgeting etc will be on offer;
- affordable loans – which always take account of individual, personal circumstances and affordability. Interest rates compare well with banks and building societies and, more importantly, there are no arrangement fees or repayment penalties. Free life cover is also provided;
- payroll deduction for both savings and loan schemes.
What should I do if I have a complaint against my credit union?
In the first instance, make contact with your credit union to discuss your concerns. All credit unions are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority. This means they are part of the Financial Ombudsman Service.
Read more about the Financial Ombudsman Service.
Which credit union should I join?
To be a member you must meet the membership criteria set by the credit union – generally referred to as the common bond.
This might be that you live or work in a certain area, belong to a particular organisation or work for a certain employer.
Some of the biggest credit unions will be open to members wherever they live in the UK.
Why doesn’t my credit union appear on the UNISON There for You network of credit unions?
Contact us and let us know the name of the credit union and we will take it from there. In addition, we will look within our directory and identify if there is already an appropriate credit union.
Why has UNISON introduced a credit union service?
UNISON is promoting credit unions as financial and ethical co-operatives that will serve members in a safe and responsible way. This is just one element of a wrap-around, holistic service that the union provides through its charitable arm, There for You, to promote positive financial wellbeing.
Why hasn’t UNISON set up its own credit union?
There are lots of well-established credit unions in the UK and UNISON believes that working in partnership is a better way of supporting individual communities, since it will be the members that have a say in how the credit union grows and develops, as well as playing a part in supporting the local economy.