A major new report on tackling poverty in the UK has highlighted the role that credit unions can play.
The report, We can solve poverty in the UK, from research charity the Joseph Rowntree Foundation (JRF) offers a plan to end poverty in this country by 2030. It is the most comprehensive strategy of its kind to set out how to solve poverty across all groups in the UK, calling for a new ‘long term deal’ to solve poverty between governments, business and the public.
A role for credit unions is identified in providing fair and affordable access to credit, as well as in helping people to save, budget and avoid problem debt.
The strategy encourages employers to provide – and promote the take-up of – credit union membership as a staff benefit to promote saving and access to affordable credit, highlighting the ease with which employees can save and repay loans direct from payroll. It also calls for the expansion of credit unions’ capacity to provide affordable credit through support from employers, local government and social investors.
The report recommends that tackling poverty should be an explicit aim in social landlords’ business plans and strategies, arguing that: “Housing associations could play a role in delivering affordable credit to their tenants, as part of a wider financial inclusion strategy, working with credit unions where possible.”
Launching the strategy, JRF Chief Executive Julia Unwin said: “Poverty divides communities and generations; it harms people’s potential and strains families; it drains the public purse and holds back our economy. The Prime Minister has made a promise to make Britain work for everyone and reform capitalism. As Westminster reconvenes this week, I urge her to deliver on this promise.”
To mark the launch of this significant strategy, JRF has teamed up with Big Society Capital to work towards raising up to £20m of social investment to tackle the ‘poverty premium’, whereby people on low incomes pay more for goods and services including credit and financial products. The initiative will support charities and social enterprises to develop solutions.
Mark Lyonette, Chief Executive of the Association of British Credit Unions Limited (ABCUL), said: “We welcome the JRF’s recognition of the role credit unions play in helping alleviate hardship and poverty. Credit unions are proud to serve people from all walks of life, which includes those who may struggle to access credit and financial services from other providers. The expansion and modernisation of Britain’s credit union movement will make us even better equipped to provide services to people right across our communities.”