MPs and other parliamentary staff now have the option to pay into a credit union directly from their wages, thanks to a new service launched on Monday.
Under the new partnership, anyone working in the Palace of Westminster is eligible to join the London Mutual Credit Union and opt to save or repay loans through payroll deduction.
A credit union is a financial co-operative that is owned by its members and exists primarily to provide savings and loans to these members. Unlike banks, they are not ultimately motivated to create profit for external shareholders
According to Prudential Regulation Authority (PRA) audited statistics from the Association of British Credit Unions (ABCUL), at the end of September 2012, over 1 million people used the British credit union sector, which held total assets of £957m.
In the six months between September 2012 and March 2013, the sector’s membership grew by 3.2% to 1,072,202, while its assets rose by 6.7% to £1.02 billion.
The London Mutual Credit Union is a co-operative for people who live or work in the London Boroughs of Southwark, Lambeth, Westminster and Camden. With over £11m in assets and over 20,000 members, it is the largest credit union of its type in London. It offers a number of services including the Credit Union Current Account.
Lucky Chandrasekera, chief executive of the London Mutual Credit Union, added, “We hope by launching this service for parliament that we can demonstrate the value of credit union membership on a daily basis to MPs and the wider parliamentary staff.”
At an event introducing the initiative in parliament, Martin Lewis, financial journalist and founder of MoneySavingExpert.com, said that credit unions were a cheaper alternative to what he called “the scourge of payday lending.
He added, “Therefore today I hope to be excited at the launch event to see senior MPs and even government ministers giving the London Mutual their backing by joining up and making use of the deduction facility. It’ll be interesting to see who puts their money where their mouth is.”
Labour leader Ed Miliband has championed credit unions as a potential solution to the rise of controversial payday lenders in the past.
In October, he said that if Labour won the next general election, he would raise around £20m a year from lenders such as Wonga, either from a 1% levy on their balance sheet or a 10% tax on their profits, and give the proceeds to their credit union rivals.
“It is time for payback,” said Miliband, after visiting a credit union in Peckham.
“We will force payday lenders to pay back into communities, so we can expand low-cost lenders that actually help families.
Meanwhile, a recent study found that consumers prefer borrowing from credit unions than payday loan companies. The research, which was funded by Friends Provident Foundation and the Barclays Community Finance Fund, found that borrowers could take out a longer payment term whilst paying back less than they would from a payday lender.
Borrowing from a credit union instead could have saved 1,219 people £145,000 in interest charges alone – equating to almost £119 per consumer.
Like our Facebook Page
Key Things to Remember When Building a Sustainable Home
4 Tips to Achieve Eco-friendly Business Operations
Are Vegan Shoes A Sustainable Option?
How to Be More Eco-Conscious In Your Everyday Life
Tips To Become More Sustainable At Home
Modern Log Cabins: Sustainability and Aesthetics
The Basics of Starting a Eco-Friendly DIY Project
Importance of Shore Hardness for Sustainable Hobbyists
Green Healthcare Practice Patient Data Compliance Guidelines
Guidance on Trading Bitcoin as an Eco-Friendly Investor
Why Making Your Business Sustainable Is More Important Than Ever
The Most Popular Environment-Friendly Flooring Options
Investing in the Ethical and Eco-friendly Has Never Been Easier
A Guide Transitioning to Safer and Environmentally-Friendly Chemicals
Role of HR in Sustainable Businesses
The Environmental Impact of Bitcoin Replacing Fiat Currencies
Tips To Make Air Conditioning Eco-Friendly
9 Zero Waste Gift Ideas For An Eco-Friendly 2021 Holiday
5 Reasons For Your Business To Go Green (Beyond Helping The Planet)
Tips After Buying an Electric Scooter to Lower Your Carbon Footprint
- Features10 months ago
Seven Health and Safety Tips for Eco-Friendly Products in a Green Home
- Energy10 months ago
Eco-Friendly Homeowners Lower Carbon Footprints through Greater Air Conditioner Efficiency
- Features9 months ago
Essential Guidelines for Eco-friendly Moving into new Home
- Invest12 months ago
The Eco-Friendly Evolution of Bitcoin Over the Years