Credit Unions

A credit union is a sort of community bank, where people who have a common bond come together to save money, and depending on your level of savings you may also be able to take out a cheap loan from the credit union rather than having to go to a bank or doorstep lender. The common bond between members is different for each credit union – it may be that all members live in the same area, or work in the same profession, etc, but most people will find they are eligible to join at least one credit union (if not more). A credit union is not a profit making organisation; it relies on members taking out loans (on which charges a low rate of interest) in order to provide its income.


Your savings will be protected just as if you were saving with a bank (up to a value of £85,000) however the rate of return you will get on them is not fixed as it would be if they were in a bank.

Credit unions are not run to make a profit, so although they do charge interest on the loans they make to members, this is at a very low level and should only be enough to cover the costs of running the credit union. If they have any money left over after paying these costs then they give this back to the members as ‘dividends’. This is not guaranteed and depends on how much money the credit union makes, it could be anything up to 8% so may work out a good deal if there are lots of people taking loans out.

Facts and Figures

In 2015 there were around 342 credit unions in the UK, with 1,269,345 members

Between them they held around £1.3 billion worth of savings, and loaned out £769 million


As the credit union is not trying to make a profit, this means that they can offer loans at a much lower rate than you may be offered by doorstep lenders or payday loan companies. It also means you can be sure your savings will be used for the benefit of your friends and neighbours rather than to earn bonuses for wealthy bankers, so some people may simply choose to save with a credit union as a more ethical option compared to conventional banking.

Credit unions have the advantage that they do not charge you any extra to pay your loan off early, and most credit unions will offer you a form of life insurance with your loan which means in the event of your death the balance of the loan will be paid off for you.

The only downside is that some credit unions will ask that you save money with them for several weeks before you can take out a loan, so you may need to plan in advance if you think you may want to borrow from them.

Joining up is straightforward and you can save weekly, monthly, or as often as you wish. Money can be paid straight from your benefits or some employers can arrange to pay money straight out of your wages into your credit union account so you don’t need to do anything – just sit back and watch your savings grow.

For more information on credit unions, you can look at the ABCUL website (The Association of British Credit Unions Limited).

Credit unions in Tameside include the Cash Box Credit Union one of our MiNT partners – based in Ashton (although they have collection points all around Tameside) and the Manchester Credit Union (collection points throughout Manchester).