MOD credit unions report progress
01 Mar 17
Credit unions serving the Armed Forces have met with the Minister for Personnel, Welfare and Veterans.
The meeting with Mark Lancaster MP at the Ministry of Defence (MOD) was an opportunity to set out the valuable contribution already made by the three credit unions – Plane Saver, Police Credit Union (under its Serve & Protect trading name) and London Mutual Credit Union – and to reaffirm the Ministry’s commitment to promoting the scheme.
Since launching in October 2015, the three credit unions have lent in excess of £2 million to more than 1,600 soldiers, sailors and airmen. The service is promoted through the shared Joining Forces web and social media presence, and many of the new members are junior service personnel who often encounter difficulties accessing credit because their job involves moving regularly and it can be challenging to build a good credit rating. For this reason, some personnel have reported being actively targeted by high cost lenders.
In addition to providing affordable credit, the credit unions are playing a valuable role in encouraging their military members to start saving regularly and to improve their financial capability, which can sometimes be limited due to the nature of life on active duty where most everyday expenses are taken care of.
In the meeting at Whitehall, the credit unions updated the Minister on the progress made to date, and plans to redouble efforts to spread the word about the services on offer were discussed and met with the Minister’s approval.
ABCUL Chief Executive Mark Lyonette attended the meeting and said: “We were delighted to meet with the Minister and to update him on the progress with Joining Forces. Evidence to date shows the clear need among forces personnel for fair and affordable credit facilities, and the benefit of payroll deduction makes managing repayments simple and easy so that forces members can focus on their vital and demanding work.
“On active service, much of the financial side of life is taken care of – which can lead to problems upon leaving service. Interventions like the credit union Save as you Borrow model recently reported on by the Fairbanking Foundation are particularly beneficial in this context. We look forward to supporting the three credit unions and the Ministry of Defence in building on this promising start.”
The set-up of the payroll deduction scheme with the Ministry of Defence was funded by HM Treasury, and the Department for Work and Pensions has since partnered with three credit unions to offer savings and loans via payroll deduction for all its staff. Encouraging all Government departments – as well as public, private and third sector employers across the country – to offer credit union membership via payroll deduction to their staff is a key policy priority for ABCUL.