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Calls for Post Office to offer credit unions

Calls for Post Office to offer credit unions

Category: Money

Updated: 24/05/2012
First Published: 24/05/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Credit union services should be greatly expanded through the UK by being included in the Post Office network, a new report has said.

Research by Consumer Focus shows a third of consumers (34% overall and 40% of those on lower incomes) would be interested in joining a credit union, but two-thirds of these say they cannot because they do not think there is one nearby.

Memberships of credit unions in the UK have increased significantly over the last decade, but membership still lags well behind the likes of the USA, Canada, Australia and Ireland where between a quarter and half of the population are credit union members.

But it seems that combining the Post Office network and credit unions could significantly increase membership and offer an alternative to high interest, short term loans such as those offered by payday lenders.

There are currently around 11,800 Post Office branches – more than all bank and building society branches combined.

Figures show 46% of consumers said that the Post Office would be a convenient way for them to access credit union services. This increased to 57% for the poorest social groups.

And almost half of consumers (46%) said they would trust credit unions more if they were available at the Post Office, including more than half of those on low incomes.

"Marrying credit unions and post offices creates a situation where everybody wins," said Andy Burrows, head of Post Offices at Consumer Focus.

"Credit unions would benefit from greater access and awareness, customers would get more convenience and alternatives to high street banking, and it would also give a shot in the arm for the Post Office network.

"The Post Office brand is trusted and could help boost confidence in, and take-up of, credit union services."

The emergence of credit unions as part of the Post Office network could help plug a gap in the market which was recently uncovered by a Department of Work and Pensions study.

It found that among low-income groups, 1.7 million do not have a transactional bank account, four million incur bank charges and up to seven million use sources of high cost credit.

In addition, other than credit unions, the DWP suggests that 'realistic options' to High Street banks are 'limited.'

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