10 things you didn’t know about
If you’re looking for an alternative to the humdrum of high street banks that offer great savings accounts and even loans at fantastic rates, a credit union might be right up your street (literally).
Credit unions are often overlooked when it comes to looking to for a way to save or borrow, often because a lot of people still don’t quite know what they are.
Here are 10 things you might not know about credit unions and why you should consider them for your future financial needs. 1. What exactly are credit unions?
Credit unions are similar to banks, they’re a place for you to save and to borrow money but where they differ is in their ownership, management and ethics.
They’re local non-profit organisations that traditionally cater to a community, area or trade which is often referred to as their common bond. Lanarkshire Credit Union serves all those who live, work or volunteer in North and South Lanarkshire. 2. They’re owned by their members
Each person who saves with them is a shareholder each with an equal say in how it’s operated regardless of how much money they have saved.
Members also elect others from their ranks to sit on a board of directors and represent their interests. They do this completely voluntarily unlike the sometimes exorbitantly paid banking CEO’s that we often hear about. 3. It’s a worldwide movement
In 2014 the World Council of Credit Unions statistics showed that there were over 57,000 credit unions worldwide with over 217 million members and it’s been growing ever since.
In the UK there are over 350 operating with a collective membership of over 1.1 million members. 4. They’re just as safe as the big banks
All staff and volunteers who hold key positions within their credit union are approved by the Financial Conduct Authority, the same people who regulate high street banks.
Your money is also covered by the Financial Services Compensation Scheme, if anything happens to your Credit Union, the FSCS automatically refunds savings up to £75,000. You won’t have to do anything. 5. They’re non-profit, meaning their members benefit
Credit unions don’t horde their profits or pay out big bonuses to their directors, instead any profit that’s made is paid back to their members.
This is known as dividends, at the end of each financial year the credit union works out what profit is left after its running costs are worked out. What’s left over is paid back to its members as dividends. 6. They offer a convenient way to save
Credit unions let you save in a way that suits you, whether that’s at a branch, a local collections point or even by Direct Debit or Standing Order there are lots of ways for you to get savings.
They also offer lots of different types of accounts from standard savings accounts to Christmas savers accounts giving you flexibility in reaching your savings goal. 7. They do loans as well
When people save with a credit union they’re helping create a pool of money from which other members can borrow.
Credit unions offer a wide variety of loans ranging from small loans that compete with pay day lenders crazy rates to larger loans at rates that are sometimes better than those offered by other traditional lenders. 8. Some even offer Life Savings and Loan Protection insurance
Life Savings Protection provides your family with a single lump sum payment to cover end of life expense in the event of your death. The value of this payment is directly linked to your savings. Generally, the more you save, the higher the benefit payment.
Loan Protection is built into your loan when you borrow from your credit union. It offers you the security of knowing that in the event of your death, your loan will be cleared. 9. People of all ages are welcome
Credit unions offer membership from birth meaning you can get a head start on savings and help your young ones get Savvy with their money.
One of the largest and most successful junior savings schemes amongst the UK Credit Union movement is run by Lanarkshire Credit Union.
They have over 7500 junior savers that have saved a whopping £726,000 to date.
They also run a project called Savvy Savers that works with over 80 schools to teach kids about finance and get them involved by running their own mini credit unions. 10. Some even work with employers to bring their employees free benefits
Credit unions have a long history of working with employers to give their employees access to an easy means of savings and affordable credit.
They believe that financial wellbeing has an impact on physical and mental wellbeing and by providing employees with access to these basic things that they will reap the benefit.
With savings and loan repayments being deducted straight from your salary you won’t ever have to worry about trying to get over to a branch or missing a loan repayment again.
Lanarkshire Credit Union provides services to people from all over Lanarkshire, serving a membership of over 19,000 people.
Visit www.lanarkshirecreditunion.co.uk to find out more.