Banking for People, Not Profit: Credit Unions in England
If you always feel like banks exist simply to get you into debt, you may not be wrong. Many people are now switching their current and savings accounts over to credit unions instead. These are much easier to join (usually you just need some form of ID and a £1 joining fee – homeless people can even join, by stating a hostel address).
Run by local people for local people, they are quite complicated to set up. But the good news is that you likely can join one that already exists, using a ‘common bond’ (where you live, a religion or profession).
You can still switch to a credit union from a bank if you are in debt. Just pay off your loans with the other bank at the same time. Read more on how to get out of debt.
Small credit unions tend to be work out of community shops or schools, whereas larger ones have their own offices. Some of the biggest city credit unions even offer business accounts and mortgages.
Why join a credit union?
Instead of high charges, credit unions encourage you to save. The accounts are simple. And then if you do need a loan for a home improvement or business, it’s only given when you have a record of saving. And at affordable rates. Way way below bank rates, as interest terms are set by law.
And if you don’t need a loan, your savings are going to help local people, rather than some shareholder far away.
Instead of interest, you get dividends. So the more you save, the more you get. And today that could be more than the national interest rate.
How to find your a suitable credit union
Enter your postcode to find your local credit union
Some are by profession or religion:
Some credit unions also offer junior accounts for children, and a few even offer tax-free ISA accounts.
Credit unions are hugely popular in Ireland, so why not here? It’s a mystery!
