ABCUL: Credit unions benefiting from distrust of financial institutions

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ABCUL: Credit unions benefiting from distrust of financial institutions

Wed 5th Nov 2008

Consumer wariness about banks and other financial institutions is working to the benefit of credit unions, it has been claimed.

A spokesperson for the Association of British Credit Unions (ABCUL) said that credit unions provide a "more understandable business model" and that as financial pressure increases, people are increasingly turning to them.

Explaining that credit unions are locally owned businesses that exist solely for the interest of their members, the spokesperson added that people are now "spreading their money around" in a quest for better protection.

He said that as the Financial Services Authority protects the first £50,000 of savings in any one institution, people have put extra amounts into other places, including credit unions.

According to research by the Local Government Association, tens of thousands of people are turning to credit unions as the economic decline continues.

Some credit unions have seen a 25 per cent increase in members over the past year, while councils are setting up more to help prevent people from turning to loan sharks and credit cards.

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