People in Wales are being encouraged to use their local credit union if they encounter unmanageable debt this Christmas, rather than resorting to using payday lenders.
According to a credit unions of Wales survey, a third of people predicted Christmas will affect their ability to pay essential household bills, including rent and mortgages.
The survey also indicated almost half had not set a budget to manage their Christmas expenditure, risking accidentally overspending and pushing debt levels even higher.
This time of year can bring huge pressures for families and can result in increased levels of unmanageable debt. To support families, credit unions deliver excellent work across Wales to provide access to affordable credit and savings.
The Welsh Government has provided more than £1 million of funding to credit unions in Wales in recognition of their work supporting financial inclusion and financial capability.
Deputy Minister for Housing and Local Government, Hannah Blythyn said:
“There will be many people struggling and possibly looking to take out some form of credit in the run up to Christmas. Credit unions are a responsible and ethical alternative to payday lenders. Credit unions offer safe and ethical savings and affordable loans for all members of the community.
“If you are borrowing this Christmas, make sure that it’s manageable and you don’t end up with a financial hangover in January.”
As financial co-operatives, with no external shareholders, credit unions are able to offer loans at reasonable rates from as little as £50-£15,000. Interest on loans is charged on the reducing balance and come with no hidden charges and no penalties for repaying the amount early.
The Deputy Minister added:
“I know Welsh credit unions are working incredibly hard in the run up to Christmas, providing loans and releasing members’ savings – and I thank them for their commitment.”
In addition to other savings products, credit unions offer Christmas savings schemes that only allow withdrawals in the lead up to Christmas, which helps families at this often difficult and expensive time of year.
In recognition of their work supporting financial inclusion and financial capability, credit unions have received more than £1m of Welsh Government funding since April 2018 to take forward a variety of projects.
These projects are aimed at boosting membership by encouraging more people to use the credit union. This includes working with employers to offer payroll savings schemes to support the financial wellbeing of staff.
For more information visit: Credit Unions Wales