Adult membership of Credit Unions has risen to its highest level ever and Unions are lending record sums of money as the cost-of-living crisis worsens, according to analysis by Freedom Finance, a leading digital lending marketplace.
The Bank of England’s latest data shows that 1.92 million people in the UK are now members of a Credit Union, up from 1.90 million at the end of Q3 2021, and total borrowing reaching £1.74bn at the end of 2021 surpassing the pre-pandemic peak of £1.70bn.
In March, a report from the Centre for Social Justice (CSJ) revealed an estimated 1.08 million people are victims of loan sharks and called for reform to the Credit Union Act 1979, including the creation of a new Credit Union Mergers Fund. Freedom Finance, a supporter of the CSJ’s Debt Policy unit, supports the call for reform and a broadening of the types of credit available following the withdrawal of many short-term credit providers.
Brian Brodie, chief executive of Freedom Finance and CSJ Debt Policy Advisory Board member, said: “The CSJ’s recent report on loan sharks identified Credit Unions as a vital financial lifeboat for many people while also helping to build people’s financial resilience by linking loans with savings.
“Raising awareness of Credit Unions will be an important first step to give those struggling to penetrate the credit market another option to explore.
“Credit Unions are only part of the solution. A strong choice of reputable providers of short-term loans and other credit will be essential to helping people through the current cost-crunch. A failure from the lending industry to provide this support will only drive more people towards insidious, illegal loan sharks.”
