Residents of the North East are being warned to steer clear of loan sharks and high-cost lenders, and to make the most of three key sources of support which are available in the area – Credit Unions and community lenders, along with free benefits calculators.
As many as 1.1 million Brits may already be in the hands of illegal lenders,[1] and a fifth of UK adults had less than £100 in savings even before the current financial crisis,[2] with new data from financial inclusion body Fair4All Finance showing that over 870,000 people in the North East are in financially vulnerable circumstances.[3]
Now, local credit unions including Darlington Credit Union along with other community lenders, have been described as a “potential lifeline” by Fair4All Finance, the financial inclusion body which is supporting the community finance sector. Credit Unions and other community finance providers currently help thousands of people in Darlington to get credit to cover essential or unexpected expenses. They also support members to put what money they can aside as savings, even whilst borrowing.
Jo Price of Darlington Credit Union, said: “We have 5,000 members across Darlington and want everyone in the area to feel reassured in knowing that organisations like us are here, ready to support more of you to take control of your finances and navigate these tricky times.
An alternative to high street banks, local Credit Unions assist households in a range of financial circumstances to afford essential items or cover unexpected expenses, as well as helping them to build their financial resilience. They are not-for-profit and will only lend if it’s the right thing for an individual’s finances and help them to consider other options if a loan isn’t the right choice.
Fair4All Finance is also urging the public to make sure they are claiming the correct benefits to help with the cost of living crisis by using online benefits calculators such as those recommended by the Government.
Benefits calculators can help households to discover if they are missing out on income to which they are entitled. The financial inclusion body Fair4All Finance says benefit calculators often help families increase their benefits income by hundreds of pounds a month, and that around £15bn of benefits go unclaimed in the UK each year.
Jo Price added: “We’d urge anyone who is already in receipt of benefits, or somebody who is unsure whether they can claim anything, to check whether they are missing out by using a benefits calculator. In just a few minutes you could find that you are missing out on hundreds of pounds of income each month – and if this means you don’t need to take out a loan but can instead keep saving with us, we see that as a good result.”
Cath Williams at The England Illegal Money Lending Team, which operates as Stop Loan Sharks in the North East, said: “We are proud to support the vital work of Community Development Financial Institutions (CDFIs) and Credit Unions across the country as they help build financial resilience in communities and increase access to fair and responsible finance, particularly for those excluded from mainstream services.
“Loan sharks are currently preying on people’s desperation in the North East right now and offer nothing more than a vicious cycle of debt and misery in return.”
“If you are worried that you may have been targeted by a loan shark, we urge you to take action and contact our team for help. We’ll give you confidential support and help you find a way out of your situation.”
The community finance sector has come together for the first time to raise awareness of Credit Unions and community lenders in a campaign co-ordinated by the financial inclusion body Fair4All Finance.
Lauren Peel from Fair4All Finance said: “Credit unions and community lenders have decades of experience in supporting households across the UK to save and borrow. They are experts in lending responsibly, whether that’s to people who are well off or to those in vulnerable circumstances. They are a key sector as we go through a distressing cost-of-living crisis. Lenders such as these, and the benefits calculators available online, could be vital resources as local people try to navigate this difficult time.”
Your local credit unions in the North East include: Darlington Credit Union, NE First Credit Union, NFRN Credit Union, Moneywise Credit Union, Northumberland Community Bank and North Tyneside Employees Credit Union.
If you are looking for a credit union near you, please visit: FindYourCreditUnion.co.uk.
There are other community lenders who are mostly not for profit, and who reinvest any surpluses into serving vulnerable customers, which can be found on FindingFinance.org.uk.
[1] https://www.centreforsocialjustice.org.uk/library/swimming-with-sharks
[2] https://www.ybs.co.uk/w/media-centre/savings-crisis
[3] Actual figure: 873,575