Personal debt

Credit union membership tops two million

Kevin Peachey

Personal finance reporter

Cash
Getty Images

More than two million people are now members of credit unions in the UK, according to latest official data.

Credit unions are locally-based organisations, where members pool their savings to lend to one another. Campaigners and regulators often describe them as more affordable alternatives to short-term lenders, such as payday loan companies.

It is the first time that membership has risen above two million, the Bank of England says, with the numbers driven by a 3% increase in adult membership in 2018 compared with the previous year, to 1.78 million.

The value of loans to members has also risen (up 7%) in the UK, passing £1.5bn for the first time, the Bank says.

Tell us about your debt experiences

The Demos report (see previous posts) has identified 29 local authority areas of the UK which it identifies as "credit deserts".

They are Torfaen, Lincoln, Barnsley, Dundee City, Rochdale, Swansea, Blackburn with Darwen, Nottingham, Hyndburn, South Tyneside, Burnley, Corby, Doncaster, Sandwell, Stoke-on-Trent, Halton, Sunderland, Caerphilly, Liverpool, Wolverhampton, Hartlepool, Neath Port Talbot, Rhondda Cynon Taf, North East Lincolnshire, Knowsley, Blackpool, Merthyr Tydfil, Blaenau Gwent, and Kingston upon Hull.

We would like to hear your experiences of debt and finding affordable loans, particularly in these areas.

Get in touch at bizlivepage@bbc.co.uk

'There were no alternatives' says payday borrower

Kevin Peachey

Personal finance reporter

Blackburn
PA Media

More on the Demos report about "credit deserts" - one of which is Blackburn, Lancashire.

One 40-year-old from the town told BBC News how he built up debt of £4,000 on payday loans, and struggled to pay it back.

Missing some mortgage payments also caused difficulty as it affected his credit score.

"There were no alternatives around [other than payday loans] as we had a poor credit record. It was too easy to get these loans, with no checks," he said.

He said he and his wife were caught up in these short-term loans and became reliant on them, then had to borrow from family and friends when they got into financial trouble.

They only escaped the debt spiral after seeking help from charity Christians Against Poverty, which helped them set up a repayment plan.

Call for action on tackling 'credit deserts'

Kevin Peachey

Personal finance reporter

Payday loan sign
Getty Images

A new report says that 29 areas of the UK are "credit deserts".

That may suggest neighbourhoods where it is impossible to borrow money - but, actually, the report says they are areas where the only option for many people are high-cost, short-term loans.

Cross-party think-tank Demos says the is high demand for affordable credit in these areas, but little opportunity to get it.

People often struggle as they may have low incomes, or thin or poor credit scores, among other factors. So, the rely on payday loans and pawn shops.

The report says there is no one-size-fits-all solution, but that local authorities and businesses need to be aware and step in to improve the situation.

Deadline looming for payday loan compensation applicants

Kevin Peachey

Personal finance reporter

Cash
Getty Images

Borrowers who believe they were mis-sold payday loans have been alerted to looming deadlines for any compensation claims.

Administrators KPMG are dealing with cases of former customers of SRC Transatlantic Limited, which operated until 2017 as SpeedyCash and had outlets in various UK towns.

Anyone who believes they have a claim must submit it to KPMG by 31 July but, owing to the collapse of the company, they may only receive a fraction of any successful claim, according to the administrators.

"We expect customers with a valid claim to get a low pence in the pound portion of the money they are owed by 30 April, 2020. It is important to note that claims made after 31 July, 2019, are very unlikely to be considered," a spokesman said.

Customers of WageDayAdvance and Juo Loans, who might also be making claims to the same administrator after its collapse, have a later deadline of 31 August.