What are Credit Unions?
Credit Unions are financial co-operatives owned and controlled by their members. They offer savings and great value loans plus they are local, ethical and know what their members want.
It is becoming increasingly popular for major public sector employers to offer Credit Union services to their employees. There are over 14 Councils with Credit Unions that are borough wide, many starting out as staff benefits like Southwark Council and Croydon.
Each Credit Union has a "common bond", which determines who can join it. The common bond may be for people living or working in the same area, people working for the same employer or people who belong to the same association, such as a church or trade union.
The first British credit union was formed by Caribbean and Irish parishoners of the Sacred Heart Church, Wimbledon, in 1964. From this very inauspicious beginning, the British "savings and loans" movement was formed.
Today there are more than 550 credit unions across England, Scotland and Wales. From their humble origins they have now grown to become a significant financial service with over £0.5 billion in assets and more than 620,000 members. If you have not heard about Credit Unions, you are not alone - so read on.
How safe are Credit Unions?
Credit Unions are regulated and authorised by the Financial Services Authority (FSA). This is the same regulator as banks and building societies and all other providers of financial services in Britain. Members of Credit Unions with savings are protected by the Financial Services Compensation Scheme. The scheme provides the following levels of compensation for savings: 100% compensation for the first £2000 of savings and 90% compensation for the next £33,000 of savings.