With everyday costs still high, people are continuing to look for ways to improve their financial wellbeing. But if you’ve been denied a loan or access to a savings account by high street banks, what are your options? Greg Potter, Head of Member Services at Leeds Credit Union, takes a look.
One popular alternative to traditional banks among people struggling to make ends meet is credit unions. The most recent figures from the Bank of England estimate that approximately 2.16 million people in the UK are currently credit union members so why exactly do so many people find them so valuable?
Credit Unions put people before profit
When you open an account with a credit union, you become one of its members. Whereas banks are for-profit businesses with shareholders to answer to, credit unions are not-for-profit businesses that are only responsible for their members’ financial wellbeing. This means they can focus on creating the best possible customer service experience for their members, instead of trying to generate profits.
Credit unions are also often more willing than banks to help you if you have a low credit score or are temporarily out of work. Some credit unions may accept a person’s application even if they have no credit history.
They work with their members
Because credit unions are owned by their members, they listen and react promptly to their questions and concerns. They also take their members’ feedback and use it to make positive changes to the way they work, enabling them to introduce new loans, savings accounts and policies specifically tailored to their members’ needs.
Their affordable loans are centred around their members’ needs
Whatever people need the money for, regardless of the amount, credit union loans are built around their members, with them typically offering a range of flexible and affordable loans that have fair and competitive interest rates which are capped by credit union legislation.
This ensures nobody is encouraged to take out a loan with unaffordable repayment rates and everybody who needs support can access it.
They look after more than just people’s financial wellbeing
If you’re a member of a credit union, you’ll also have access to financial advice, such as how to borrow responsibly or develop an effective savings habit.
It is common knowledge that financial health impacts mental health. However, having access to financial information and advice helps people manage their finances better and can stop them developing stress-related mental illnesses that prevent them from acting to improve their financial situation.
Your money is safe with them
Because they’re authorised and regulated by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), which protects their members by ensuring they are run to strict regulatory standards, credit unions are every bit as safe as high street banks.
Furthermore, members’ savings are protected by the Financial Services Compensation Scheme (FSCS), meaning that if anything DID happen to your credit union, your money would be safe and your finances would remain intact.
Leeds Credit Union provides affordable financial services to people in Leeds, Wakefield, Harrogate and Craven.
Photo: Leeds Credit Union’s city centre branch
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