Credit unions

A Credit Union is a profit sharing, democratically run financial co-operative which offers convenient savings and low interest loans to its members. Members own and manage the Credit Union themselves.

The  main objectives of a Credit Union are:

  • To encourage members to save regularly
  • To provide loans to members at low rates of interest
  • To provide members with help and support on managing their financial affairs (if required)

Key benefits of a Credit Union:

  • An easy and convenient way to save and borrow
  • Low cost loans
  • Insurance at no direct cost
  • People can learn new skills

Credit Unions can provide a focal point for a community by bringing people together. By working alongside each other, benefits can then be realised for individuals and the community at large. A Credit Union can also help to revive the local economy by keeping money in the community. Loans to members can mean income for local shops and businesses.

How does a Credit Union work?

Members make regular savings, as little or as much as they wish. These savings then form a common pool of money from which loans are made to members. When members have been saving for a certain period of time (usually about 12 weeks) they can apply for a low-interest loan from the pool.

Who can join a Credit Union?
People who join a Credit Union must be part of what is called a "Common Bond". This may be defined in terms of the area in which people live in or work in, or through associations with particular clubs or groups. Credit Unions then welcome everybody from within a Common Bond, regardless of income, employment-status or age.

How much do I have to save?

This is dependent on the particular rules of any given Credit Union. However, members are usually asked to save whatever they can afford, whether this be  £10 or 50p a week. The only requirement is that members save regularly.

Will I receive any interest on my savings?

As a Credit Union grows it may declare a dividend at the end of the financial year. It can pay a dividend of up to 8% a year, although it will be unlikely to be able to afford as much as this during the first few years of operation.

How Soon And How Much Can I Borrow From the Credit Union?

Most Credit Unions expect you to save regularly for around 3 months before allowing a loan, and even then, any loan will be usually linked to your savings in some way.   The amount you will be able to borrow will be dependent upon how much you need, what you can afford to repay and the policies of the particular Credit Union.


It is a legal requirement that Credit Unions are registered with the Financial Services Authority (FSA). This ensures regular monitoring by the FSA, independent auditing and adherence to other requirements set out in the Credit Union Act of 1979.


Credit Unions are insured against fraud and theft. They also provide life and loan protection insurance at no direct cost to the member, payable to a nominated beneficiary.

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Contact us

0303 123 1702

Allerdale Borough Council
Allerdale House, Workington, Cumbria,
CA14 3YJ