Category Archives: Finance

Global credit union movement surpasses 260 million

The World Council of Credit Unions has released its latest report, which shows the continued growth of credit union membership around the world, surpassing 260 million members in 117 countries. This is an increase from its 2016 report, which showed membership of 235 million members in 109 countries.

WOCCU logoThe most notable changes from the end of 2013 to 2017 are 12 million new members in the US, 11 million each in Latin America and Africa, 7 million in Asia and one million in Europe.

“This year we can celebrate as a global community. We have realized our vision of reaching 250 million members by the year 2020,” said Brian Branch, World Council president and CEO. “We see that membership growth continues to reflect the important role that credit unions have in providing economic empowerment to people worldwide.

“The three primary challenges we hear from credit unions everywhere are advocacy, disruptive technology and membership growth. For 2019, we will launch the logical next step and take on the second global challenge, which is disruptive technology. We are gearing our efforts toward digitization, including access to core services by online and mobile channels, automation of internal processes and connection to local payments and electronic ecosystems. If we want to continue growing and competing in tomorrow’s disruptive markets, we take on this challenge, make it our own and market the advantage to serve the under-served.”

The World Council of Credit Unions is the global trade association and development platform for credit unions. It promotes the sustainable development of credit unions and other financial co-operatives around the world to empower people through access to high quality and affordable financial services.

World Council reports data based on country responses to its annual survey and does not make estimates for non-reporting countries. The Statistical Report provides the most comprehensive data on the global credit union movement available and is cited widely by governments, international institutions and analysts as an expert resource.

World Council has implemented 300+ technical assistance programs in 89 countries. Worldwide, 89,026 credit unions in 117 countries serve 260 million people. Learn more about World Council’s impact around the world at www.woccu.org.

Charity calls on government to commit 1% of annual cost of dementia to research

Alzheimer’s Research UK, the UK’s leading dementia research charity, is calling on government to adopt a bold new action plan to bring about a life-changing dementia treatment and improve the lives of people with the condition. The charity is urging government to commit to spending just 1% of the annual cost of dementia on research into the condition by 2025 to transform research efforts.

Alzheimer's Research UK logoThe call comes as the charity launches its new Make Breakthroughs Possible campaign and pledges to commit a further £250m to dementia research by 2025. Dementia is the leading cause of death across the UK and the number of people living with the condition is expected to grow to 1 million in just three years. Alzheimer’s Research UK believes there is no time to lose if progress is to be made for the millions of people with dementia and their loved ones across the UK.

The plan detailed in the charity’s new report, “No time to lose: An action plan for dementia,” sets out five clear actions designed to bring about a new dementia treatment and improve lives. The call for increased investment in dementia research aligns the condition with investment in other major disease areas.

Dementia currently costs the UK economy £26bn each year, much more than other major health conditions, like cancer which costs £18.7bn. In contrast, only £83.1m, or 0.3%, of the annual cost of dementia is put towards researching the condition compared to 1.4% put towards cancer research.

Increasing funding for dementia research to just 1% of the cost of the condition would accelerate breakthroughs similar to those made in conditions like cancer in recent decades, which have already transformed thousands of lives.

Hilary Evans, Chief Executive for Alzheimer’s Research UK, said: “Dementia is the health crisis of our time. With no way to stop or slow the diseases that cause it, no-one has yet survived dementia but we hope to change that.

“We’ve seen progress in recent years thanks to the Prime Minister’s Challenge on Dementia launched in 2012, but without renewed government priority given to dementia, this momentum risks being lost. Dementia has been conspicuously absent from priorities set for the health system in recent months, and we cannot afford to let the condition slip off the radar at this critical time.

“We must see government ensure dementia is a leading health priority and begin to push for the progress seen in the treatment of diseases like cancer and HIV/AIDS over recent decades. Spending just 1% of the cost of dementia on research would make breakthroughs possible, and the thousands of families across the UK who are feeling the impact of dementia deserve nothing less.”

The action plan laid out by Alzheimer’s Research UK aligns its goals with the G8 ambition to bring about a life-changing treatment for dementia by 2025, which the UK government helped to set in 2013.

The plan includes five key actions for government:

  1. Commit 1% of the annual cost of dementia to research
  2. Double the number of scientists and volunteers taking part in dementia research
  3. Work to detect the diseases that cause dementia before symptoms appear
  4. Increase awareness of how people can reduce their risk
  5. Prepare now for future treatments so they reach people quickly.

The report can be read in full at: alzheimersresearchuk.org/actionplan.

Charity Pioneers campaign recognises good deeds

Accounting software company Sage is celebrating the good deeds of the most inspirational charity workers in the UK and US. The recently announced Charity Pioneers campaign recognises hard-working people that have dedicated their lives to a cause or charity. 

Charity Pioneers Campaign Photo

Sage is on the lookout for the most groundbreaking and life-changing charitable faces working in the UK and US today. Whether they’re promoting causes like entrepreneurship, diversity or education, these individuals actively strive to make the world a better place for young people, women, and military veterans. The charity pioneers Sage has chosen so far come from a range of backgrounds and demographics and yet they all share one thing in common – they’re changing lives for the better and that deserves to be celebrated.

Nominate a Charity Pioneer

Know someone that deserves recognition? Sage is still hunting for the very best. To submit a nomination, enter the name of the chosen nominee, the type of charity they work for, and the reason they should be recognised. Note that nominees must work with young people, women, or military veterans.

Sage Group logo

Not only could nominees feature alongside other Charity Pioneers, but their charity could also win the GBP equivalent of $5,000 of Enterprise Fund funding (Sage Foundation). The competition closes on 21st September 2018 and the campaign page can be found here: https://www.sage.com/en-gb/c/v/charity-pioneers/.

Sage offers a range of products to help charities and nonprofits, such as its accounting software which has been specifically designed to handle charities’ financial needs, including GiftAid and VAT.

Working families fall short of minimum living standard

The overall cost of a child over 18 years (including rent and childcare) is £150,753 for a couple and £183,335 for a lone parent. But work doesn’t pay low-income families enough to meet a no-frills standard of living, new research from Child Poverty Action Group (CPAG) shows.

Cost of a Child ReportA combination of rising prices, benefits and tax credits freezes, the introduction of the benefit cap and two-child limit, the bedroom tax, cuts to housing benefits and the rolling out of Universal Credit have hit family budgets hard.

Life has been getting progressively tougher for families on low or modest incomes over the past ten years, with families on in-work and out-of-work benefits hardest hit, the report warns.

Despite the introduction of the ‘national living wage’, low-paid families working full-time are still unable to earn enough to meet their families’ needs. The gains from modest increases in wages have been clawed back through the freezing of tax credits.

Even families with two parents currently working full time on the ‘national living wage’ are 11% (£49 per week) short of the income the public defines as an acceptable, no-frills living standard.

The cumulative effect of cuts, frozen benefits and new punitive measures hit lone parents particularly hard. For lone parents, even a reasonably paid job (on median earnings) will leave them 15% (£56 per week) short of an adequate income because of the high cost of childcare. A lone parent working full-time on the ‘national living wage’ will be 20% (£74 per week) short of what they need to achieve a minimum standard of living. However, a lone parent relying solely on benefits will go without 40% of the budget they need for a socially acceptable minimum.

With the introduction of the two-child limit, families with three or more children fare worst – a third child born after 1 April 2017, for whom no additional support will be provided, costs around £86,500 or £4,800 a year excluding childcare.

Larger families on out-of-work benefits who avoid being hit by the two-child limit will instead be hit by the benefit cap which restricts support to £23,000 in London and £20,000 outside London regardless of family size. The impact of the benefit cap means that an out-of-work family with three children living in a privately rented home will receive just a little over a third of what they need to meet their needs, with a shortfall of around £400 per week.

The costs of a child are calculated according to a minimum standard of income that covers the costs of essentials such as food, clothes and shelter as well as other costs necessary to participate in society. It looks at the needs of different family types and is informed by what ordinary members of the public feel is necessary for both couples and lone parents bringing up children.

Chief Executive of Child Poverty Action Group Alison Garnham said: “Today, the majority of children growing up in poverty have working parents. While the number of parents in work is increasing, income from work alone is not sufficient to enable some to meet their families’ needs or escape poverty and the cost of a child is substantial. There is strong public support for government topping-up the wages of low-paid parents and investing in children is the best long-term investment we can make. By using the forthcoming budget to unfreeze benefits and restore work allowances, the government can take steps towards making work really pay.”

Click here to read the report.

ABCUL launches Work Not Worry social media campaign

ABCUL – the Association of British Credit Unions – has launched a social media campaign, Work Not Worry, to raise awareness of the benefits of partnerships with credit unions among employers and to encourage more employers to establish new relationships with their local credit union.

Evidence suggests that financial stress costs the UK economy £121bn (Neyber 2016) and 30% of employees are making uninformed financial decisions about saving and spending (CIPD, 2017). 26% of working age adults in the UK have no savings and 1 in 4 workers have lost sleep over money worries (CIPD, 2017).

Work Not Worry

Credit unions offer savings and affordable loans with payments deducted from pay and, for over 30 years, employers have used the services of credit unions in their workplace. This includes household brands and institutions such as Admiral Insurance, Royal Mail, British Airways and the NHS. Research funding by Citi Foundation states that 70% of employees who take advantage of credit union partnerships feel more financially capable and better supported and 83% of employer partnerships demonstrate Corporate Social Responsibility to staff by providing a material benefit at little or no cost to them.

A majority of employers say working with credit unions improves the financial capability of staff and thus helps create a more productive and better supported workforce.  This is backed by Money Advice Service research on employer best practices on financial challenges and their impact in the workplace, which states that 59% of employees with current financial worries say money concerns prevent them from performing their best at work.

A lack of savings is a major problem for many workers, but credit unions’ offer Save As You Borrow  – which asks people to save a small amount while repaying their loan – and this has great benefits in creating a savings habit.  Research by the Fairbanking Foundation found that while only 26% of credit union borrowers saved regularly before joining their credit union, 71% intend to save regularly after repaying their loan.

Matt Bland, Head of Policy & Communications at ABCUL, said: “In our conversations with employers, it is clear that many are not aware of the financial difficulties facing their staff.  Those that are have sadly seen it became a serious issue in the workplace before they had chance to respond. We regularly hear horror stories of people falling into a downward cycle of repeated and escalating payday loans.

“Credit unions have a proved track record of turning borrowers into savers. Research such as the Save As You Borrow report proves that credit unions are playing a vital role in helping their members become financially responsible. The report shows that credit unions turn 71% of borrowers into savers and that 96% of employees that are encouraged to use payroll deduction through the credit union have found it helpful.

“All employers have to do once a partnership is set up is spend a couple of minutes making the deductions each pay day – one file transfer, one payment. All employees have to do is agree to a deduction of their choice per month – and it comes directly from their salary, making life easy for everyone.”

The campaign runs for four weeks from 9 July – 3 August. For more information about the campaign and to search for a credit union partnership, visit http://worknotworry.org/

Credit union marks Armed Forces Day with Forces Finance commitment

London Mutual Credit Union launches a dedicated new financial support service for the armed forces on this year’s Armed Forces Day (Saturday 30th June).

Forces Finance PhotoSince first partnering with the Ministry of Defence in 2015, London Mutual Credit Union has provided £2 million worth of loans to over 1000 armed forces personnel, saving them an estimated £1.3 million compared to the cost of high street lenders and various payday lenders such as Wonga.

The new Forces Finance initiative will give serving members of the armed forces and their families access to a range of specially developed financial services which meet the unique requirements of armed forces personnel.

London Mutual Credit Union is a financial co-operative that exists for the benefit of its members who live and/or work in the London boroughs of Southwark, Lambeth, Westminster or Camden, and serving members of the British Armed Forces. Established in 1982, London Mutual Credit Union has over 28,000 member-owners.

Historically, service personnel have encountered difficulties accessing credit and other financial services, due in part to moving regularly and not being able to build up a good credit rating. Some have also been targeted by payday loan companies.

Lucky Chandrasekera, Chief Executive of London Mutual Credit Union, says: “Our figures show the clear demand for financial services built around the specific needs of armed forces personnel and their families. The disruptive and often highly mobile nature of life in the services can make financial planning difficult for many service personnel, as well as making it harder to build an address history or a strong credit record.”

Unlike banks, credit unions are owned by their borrowers and savers and serve a specific community. This enables them to offer advantageous rates, products and terms tailored to the specific circumstances of their members.

Lucky adds: “The launch of the Forces Finance service is designed to build on our experience of working with armed services personnel over the past three years and underscores our commitment to delivering a bank built around ‘serving those who serve’.”

In the months ahead, the credit union will work with its 1000 members who are in the armed forces to design new financial products and member benefits built around the needs and realities of forces life.

In addition, on this year’s Armed Forces Day the credit union will launch a dedicated website and large scale marketing campaign designed to reach serving members of the armed forces.

Childcare problems cost mums £3.4 million each day

The childcare system is costing mothers in England £3.4 million a day because it prevents them from working, according to new analysis from Save the Children. That’s £1.2 billion every year.

Save the Children logo

The charity estimates there are around 89,000 mothers of children under five who would like to get back into work but say that childcare is the main barrier to doing so.

Steven McIntosh, Director of UK Poverty Policy, Advocacy and Campaigns at Save the Children said: “Mothers describe a childcare system that feels stacked against them. They tell us it’s nightmare to navigate with barriers to work at every turn. The result is an astounding loss in earnings, hitting families already battling to make ends meet. The financial pressure and stress that creates at home is never good for parents or their children. It’s time to make childcare work for families.”

Research shows childcare issues are the number one barrier to work for parents with young children. Despite recent reforms, Save the Children says that parents are still facing sky-high childcare bills and struggling with a complicated system – with almost half of parents saying they have no idea or are confused about what support they should get. The charity says that they are left unable to access the childcare they need to work, which can tip families into hardship.

Bianca, 36, is a Mum from East London with two boys aged three and seven. After working full time for ten years, childcare issues forced her to give up her job as an education team leader in a college.

Bianca said: “ I absolutely loved my job and I could see myself progressing. It was the cost of childcare that made me give it up, because if I’d had to pay for my younger son to be in nursery full-time that would have been a massive chunk of my salary. We made sure we lived within our means but of course you lose out on some things.

“There are a lot of people who have a lot to give to the economy, but childcare is such a massive barrier. The only way you can jump over that barrier is if you’re willing to shell out a lot of money and have little left for three or four years. We did make that choice to have children, but we shouldn’t be penalised for it, and that’s how it feels at the moment.”

Research shows that the average take home pay for a mum working full time is just over £20,000 and almost £45,000 for a couple both working full time. Even taking into account free childcare hours and government subsidies, the cost of childcare for two children can still be more than £8,000 a year. That is 39% of the mother’s take home pay – twice as much as she pays in tax. Parents say that childcare bills are still too high, with many claiming it costs more than their mortgage or rent, or that it doesn’t make financial sense to go back to work.

To address the problems of cost, complexity and accessibility in the childcare system which are preventing parents from working, Save the Children is calling on new government ministers responsible for childcare to urgently set out the next steps to delivering a childcare system in England that is high quality, affordable, easy to use and fits around families’ lives.

Research reveals postcode lottery of care

Responses to a Freedom of Information request to local authorities have revealed a worrying postcode lottery of care, Royal London has revealed.

Royal London logoThe insurance company contacted 150 local authorities, of which 125 responded. The replies show a huge variation in both the amount councils will pay towards care home costs, and the extent to which people have to ‘haggle’ with their local authority to get a good deal.  Elderly people who enter care in a ‘crisis’ situation and do not have family members to advocate on their behalf could lose out when it comes to negotiating care fee packages, according to Royal London.

The research identified three different approaches taken by local authorities to funding care:

  • Authorities which have a fixed ceiling for care home funding which they will not exceed, regardless of actual care costs
  • Authorities which have a published ceiling but which regularly exceed it on a case-by-case basis
  • Authorities which say they have no set fee limit but negotiate each placement on a case by case basis

Commenting on the findings, Dominic Carter, Alzheimer’s Society Senior Policy Officer, said:  “The unacceptable postcode lottery of care that people face nationwide has been exacerbated by a lamentable lack of funding from Government. Local authorities have been left with precious little resource to provide the care people with dementia need.

“Because people with dementia have such complex needs, places in care homes are on average seven to ten per cent more expensive – but the rates local authorities pay hardly ever recognise this additional cost. On top of this, the report today highlights how much local authority funding differs across the country, heaping even more financial pressure on families in unlucky postcodes.

“The Government says it is committed to reforming social care, but we need to see enough funding to provide good quality, affordable care for everyone with dementia, no matter where they live.”

Steve Webb, Director of Policy at Royal London, added: “We have uncovered a disturbing patchwork of support for people needing residential care, which varies hugely depending on where you live.  The most worrying variation is the extent to which residents are expected to haggle with the council in some parts of the country.

“Whilst responding to individual needs and circumstances sounds like a good thing, it is very likely that older people who have vocal family members to support them will be able to strike a better deal. Local authorities must be very careful to ensure that they do not take advantage of the poor bargaining power of vulnerable elderly people, leading them to accept the cheapest care provision rather than the most suitable”.

Credit union calls for volunteers

London Capital Credit Union is looking for volunteers to help deal with the ever increasing number of member enquiries.

Volunteering graphic

The credit union is a not for profit savings and loans co-operative based near Archway tube station in London, which is dedicated to encouraging people to save rather than borrow, while also providing low cost loans when needed. They are looking for additional volunteers to help their busy team assist with enquiries from members.

Volunteers need to have certain skills and capabilities, including being good with numbers, competent in basic spoken English, honest, reliable, friendly and outgoing. In return, the credit union will provide experience and training including in customer service, effective telephone use, using computers and different software packages and effective office management.

Volunteering with the credit union can provide many benefits, including a ‘feel good factor’ of knowing you are helping people, excellent work experience in financial services, experience of working in a busy commercial environment and access to training and improved employment opportunities.

Martin Groombridge, London Capital Credit Union Chief Executive, said: “As a financial co-operative, which is owned and run by our members, the credit union relies on the support and dedication of a team of volunteers working alongside our small staff of paid employees. A number of additional volunteers are now being sought to assist with the increase in our business as we help more and more people manage their money.

“Although the positions are unpaid, they offer several benefits, including meeting new people and making friends while working in a supportive and friendly team, gaining direct experience of the financial services industry, strengthening your CV and helping to benefit the community.”

To find out more about volunteering with the credit union click here, or call them on 020 7561 1786 for an informal, no obligation discussion.

London Capital Credit Union reports record growth

Members who went along to London Capital Credit Union’s AGM heard how the credit union has continued to grow rapidly and that 2015-16 was another record year.

LCCU logoIn the financial year 2015-16, the credit union’s membership increased by 19%, savings by 22% and loan balances by a huge 30%.

The AGM, which was held at the UNISON Centre in London on 2 February, saw a fantastic turnout of 148 members who found out how their credit union had performed over the past year and its plans for the future. At the meeting, members agreed an increase in the credit union loan interest rebate and Young Savers Account interest from 0.75% to 1% while maintaining dividend on savings at 0.75%.

Helen Baron, Director and President of London Capital Credit Union, said: “London Capital Credit Union is one of the fastest growing credit unions in Britain. We now have some 15,000 members who between them have more than £10 million in savings. In 2015-16 we gave out over 5,700 loans to a value of nearly £8 million.

“The last twelve months or so have been very exciting for the credit union as we work to meet our social goals as well as providing fair and affordable financial services. We were one of the first financial institutions in the UK to sign up to the Women in Finance Charter; we became an accredited London Living Wage employer and the Fairbanking Foundation charity awarded its first 5 star mark to us for our ‘Saver Loan’ and ‘Instant Saver Loan’ products.

“We continue to focus on providing first class customer service and our annual member survey continues to show high levels of overall member satisfaction. This is borne out by the fact that much of our growth comes through personal recommendation.

“We look forward to continuing to offer a range of fair and flexible financial solutions which meet the needs of all members of our community – whether that is loans provided at a reasonable rate of interest, the promotion of thrift through the accumulation of savings or education in the wise use of money.”

London Capital Credit Union was established in 1962, and provides services for anyone living, working or studying in Barnet, Camden, City of London, Hackney, Haringey or Islington, as well as any member of Unite the Union or UNISON in Greater London, any member of The Co-operative Group South East Region and the employees of many other local and national organisations.