Labour MPs urge Chancellor Reeves to bolster cheap credit for low-income individuals through expanded credit unions.
A group of Labour Members of Parliament, including chairmen of parliamentary committees, have sent a letter to Chancellor Rachel Reeves urging her to enhance the financial inclusion bill currently making its way through parliament. The proposal involves adding a duty on housing associations to promote credit union membership among their tenants, as well as providing access to government-backed schemes such as Help to Save.
The push comes amidst growing calls for affordable credit and savings options in light of the cost-of-living crisis. Credit unions have struggled to gain traction in the UK, unlike in many European countries and the US. However, over the past five years, membership has grown by 9% to reach more than 1.5 million members, with outstanding loans totalling almost £5 billion.
The Labour MPs cite the success of military credit unions as an example, which have become significant lenders and models for UK-based institutions. They also highlight the importance of providing affordable alternatives to high-cost lenders like payday loan companies.
To achieve their aim of doubling the size of the credit union sector, the MPs propose several measures, including:
- A "right to save" policy that enables employees to access a credit union via auto-enrolment schemes.
- Mandatory promotion of credit unions among social housing tenants and staff.
- Easing of regulatory rules governing inter-credit union lending.
By bolstering support for credit unions, Labour MPs hope to increase access to affordable credit and savings options for low-income individuals in the UK.
A group of Labour Members of Parliament, including chairmen of parliamentary committees, have sent a letter to Chancellor Rachel Reeves urging her to enhance the financial inclusion bill currently making its way through parliament. The proposal involves adding a duty on housing associations to promote credit union membership among their tenants, as well as providing access to government-backed schemes such as Help to Save.
The push comes amidst growing calls for affordable credit and savings options in light of the cost-of-living crisis. Credit unions have struggled to gain traction in the UK, unlike in many European countries and the US. However, over the past five years, membership has grown by 9% to reach more than 1.5 million members, with outstanding loans totalling almost £5 billion.
The Labour MPs cite the success of military credit unions as an example, which have become significant lenders and models for UK-based institutions. They also highlight the importance of providing affordable alternatives to high-cost lenders like payday loan companies.
To achieve their aim of doubling the size of the credit union sector, the MPs propose several measures, including:
- A "right to save" policy that enables employees to access a credit union via auto-enrolment schemes.
- Mandatory promotion of credit unions among social housing tenants and staff.
- Easing of regulatory rules governing inter-credit union lending.
By bolstering support for credit unions, Labour MPs hope to increase access to affordable credit and savings options for low-income individuals in the UK.
, it's about time we saw some progress on affordable credit and savings options for low-income individuals. I mean, have you seen those payday loan rates? they're like usury loans or something 
. so yeah, if Labour MPs can make this happen, that'd be a major win. and who knows, maybe we'll even start seeing more people join credit unions and become financially savvy (laughs). btw, 1.5 million members is still low compared to those European countries 
.
The success of military credit unions in other countries is certainly an interesting precedent, but I think we should be cautious about blindly adopting a similar approach without doing our due diligence. Furthermore, what's the plan for addressing any potential concentration risks if a few large credit unions dominate the market? Let's hope the government takes a nuanced and multi-faceted approach to this issue 
i feel for low-income ppl tho cuz payday loans are just awful 
and its good that labour mp's are trying to help out with this "right to save" policy lol sounds like something from a 90s infomercial 
so i think its a sick move by labour mp's 2 try 2 boost credit unions. theyve come a long way since they started w/ only 1.5 mil members now! 
theyre talkin bout doublin the size of the sector which wud be AMAZING. gotta say tho, a "right 2 save" policy sounds like a total game changer lol 
auto-enrolment schemes wud make it so easy 4 ppl 2 start savin & borrowin. lets hope chancellor reeves listens & makes some changes 
. I mean, what's to say these credit unions won't just end up as fancy versions of payday lenders? And don't even get me started on the "right to save" policy - that's just a fancy way of saying they're gonna make us all work for some stupid pension scheme 
It's crazy how expensive it is to live right now, especially for those on a tight budget. My kid's friend has parents who have to pay their kids £500 just to get a small loan from a payday lender - that's just not fair 
. Credit unions are like a breath of fresh air in this situation. I've heard good things about them, it's great they're growing membership and now the MPs want to give more support.
. And promoting credit unions among social housing tenants would be amazing - you'd be surprised how much of a difference it could make in someone's financial situation 
. We need more affordable options out there and I hope this initiative will help get that happening 
If they can help us replicate that success, that'd be awesome. The idea of a "right to save" policy sounds like a great idea too – it'd be nice if employers could encourage their employees to use these credit union options 
. Overall, I think Labour's proposal is a step in the right direction and I hope it leads to more affordable credit options for people who need them 
. i mean, have you seen the growth in membership over the past 5 years? 9% is no joke 
. they're like the OGs of affordable lending 
. labour's proposal is on point 
. doubling the size of the credit union sector would be a major win 
. let's get more people accessing affordable credit and savings options, especially for low-income individuals 
.