'˜Loan sharks' nemesis: How credit unions put people ahead of profit'

If you think a credit union is not for you, Cabinet Secretary for Communities and Local Government Aileen Campbell has a few reasons that might just change your mind.

Aileen Campbell, left, helps launch the campaign at Capital Credit Union in November
Aileen Campbell, left, helps launch the campaign at Capital Credit Union in November

January is traditionally the time for resolutions. For many of us, taking control of our personal finances is at the top of that list – both saving and paying off debt.

But when times are tough, many people turn to unaffordable credit from predatory, high-cost lenders.

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That’s why it’s vital that we continue to celebrate and support the key role credit unions play in our communities as providers of fair and ethical financial services.

Last November, we launched a campaign encouraging people to join their local credit union. You may have noticed the message – “People, not profit” – on posters, buses, online and in newspapers across Scotland or heard the adverts on the radio.

Over 400,000 people in Scotland are already members of a credit union, but many more are still unaware of the services they offer. If you’ve never heard of a credit union or you think it’s not for you, here are just a few of the reasons why you should consider joining.

Community-focused saving and lending

Credit unions are for everyone, and they exist to provide an inclusive financial community and act in the interest of all members.

Communities of people unite and pool their money to save for the future or specific items and also to provide each other with ready access to credit. This philosophy of ‘people helping people’ is at the core of the credit union movement.

With this in mind, many credit unions offer free financial education and additional services designed to help and encourage their members to save regularly.

Plus, credit unions are covered by the Financial Services Compensation Scheme (FSCS), so your money is just as safe in a credit union as it is with a UK bank or building society.

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Competitive rates with an ethical approach

The credit union model is a special one. Members can join through their local community, or with their employer. This means they are more likely to consider and understand your personal circumstances and to make decisions based on more than just your credit score.

Payroll deduction

The Scottish Government is also supporting credit unions to partner with employers to offer payroll deduction schemes to help people start saving.

I believe every workforce should have access to safe, ethical and affordable finance. There are clear links between financial health and levels of well-being and productivity – that’s why we encourage employers from both the private and public sectors to ensure staff have access to regular savings and ethical loans by partnering with a credit union.

By making it easier for staff to build up a ‘savings buffer’ we can help keep more people out of the hands of high interest lenders.

In the Scottish Government we’re trying to lead by example. We regularly encourage our staff to take up credit union membership.

Joining your local credit union

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If you’re interested and you’d like to find out more, visit our campaign website: www.creditunions.scot. Here you can search for your local credit union and find answers to common questions, as well as facts and testimonials.