Credit Union Lending Reaches Record Levels As UK Borrowing Costs Rise
11th March 2023
The figures were revealed as the government plans new rules for the sector, allowing it to deliver more products including car finance.
Figures from the Bank of England show that credit unions are lending record sums to UK customers, as the cost of borrowing continues to rise.
Analysis of the Bank figures for the third quarter of 2022 by Freedom Finance shows that total borrowing reached £1.92bn - up £255m (15%) on the same quarter in 2021, and up £51m from the previous quarter.
The UK credit union sector has 1.94 million members, more than 38,000 higher that the same period in 2021, the latest Freedom Finance Credit Monitor adds.
Average household quoted rates on credit cards hit 22.46%, their highest levels since 1998, while personal loans posted their highest quarterly increase of all time in Q4 2022.
Freedom Finance CEO Emma Steeley said: "Credit unions play a critical role in plugging this gap but they remain poorly known and understood.
"This is why it is so important that the industry continues to beat the drum for all providers - including credit unions - who are able to broaden access to the credit market and help more people benefit from more products which are suitable for their circumstances."'
Robert Kelly, CEO of ABCUL said evidence of the growth of the sector was "encouraging".
"Our sector continues to gather pace as more people from all walks of life trust credit unions," he added. "Credit unions offer safe savings and access to affordable and ethical credit facilities alongside access to a range of associated products and services, however they are bound by legislative framework that was originally implemented in 1979."
"ABCUL and its member credit unions have lobbying hard behind the scenes for many years" with legislators and regulators for a major reform of the Credit Union Act 1979, and in result, "a more enabling legislative framework will be delivered by April/May 2023".
New legislation - announced at last year's ABCUL conference by Treasury minister John Glen - will give credit unions the opportunity to provide car finance under Hire Purchase (HP)/Conditional Sale/PCP arrangements, and general insurance products and services.
This will bring “a hugely exciting time for the credit union sector", said Kelly, enhancing its “ability to serve many more consumers across the country and to serve a wider share of the financial needs of households and communities”.
For Highlands and Islands Join Hi-Scot Credit Union
It is still early enough to join the Hi-Scot Christmas Saver Plan
Related Businesses
Related Articles
3500 thousand credit union members save with Hi-Scot credit union. Starting to save in January will make things a lot easier by Christmas 2024.
At meeting of the board of the Hi-Scot Credit Union the directors agreed not to follow other institutions like banks to put up interest rates. Well worth checking what rates you can still get from a credit union.
Hi-Scot credit union covers the Highland and Islands and is a not for profit organisation helping more and more people. Hi-Scot has been growing slowly over recent years and now holds significant savings.
Addressing credit union professionals at the ABCUL Conference last month, John Glen MP, Economic Secretary to the Treasury, highlighted the positive impact the sector have in communities across the country. The Minister thanked credit unions in his speech for "delivering services that your members, communities, and the country need...
As the world begins to hesitantly open up, it's no surprise that the past two years have taught us the value of shopping local. But have you ever thought about banking local? "A credit union is rooted in the community, especially as it is owned by its members and not external shareholders," said David Mackay, General Manager of HI-Scot Credit Union.
The Banking Protocol is a rapid response scheme that will enable credit union staff to alert police when they suspect a customer is being scammed. Police will attend the branch within the timeframe of an emergency response, enabling them to provide an effective customer intervention, secure evidence to enable them to investigate the potential scam and sometimes catch fraudsters in the act.
The history of credit unions in USA has been one of growth over many years. The public in many states seem to have moved in greater numbers and saved even more with their local credit union.
World Council of Credit Unions is excited to launch a new monthly podcast that will provide the international credit union community with an in-depth look at some of the interesting and important stories it has to tell, particularly in the areas of international advocacy, international projects, education and networking, and digital transformation. The Global Credit Union Podcast will also be telling stories about the work credit unions across the world are doing on behalf of their members.
The latest quarterly report by the Bank of England shows UK Credit Unions continue to increase in strength. The report published on 30 April 2021 showed - Adult membership of credit unions increased in 2020 Q4 after decreasing in 2020 Q3.
This new project aims to share research and resources with credit unions in the UK and Ireland. Filene Research Institute announced an exclusive partnership with the Dublin, Ireland-based CMutual to expand research and resources available to credit unions in the United Kingdom and Ireland.
