Finance & Debt

BEESMART

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Manchester Credit Union introduces BEESMART

Manchester Credit Union (MCU) has recently become a Principal Partner of GMPA and we look forward to supporting them and the fantastic work they do in Greater Manchester to tackle the root causes of poverty. We believe everyone is entitled to a secure job which pays enough to live on, without constantly struggling to make ends meet.

As a business that shares similar values as GMPA, we would like to share some information about what we do and in particular, tell you about a free benefit that local employers can offer to their staff to improve their financial wellbeing.

MCU, a financial co-operative, started life in 1991 in Beswick as part of the council’s anti-poverty strategy, and we recently celebrated our 30th anniversary of providing savings and affordable loans to people who live and work in Manchester, Bury, Rochdale, Tameside, Trafford, Stockport and the High Peak. We have grown our membership to over 32,000 and so far this year have opened 1200 saving accounts and provided over 11,000 affordable loans to people in the local community who might struggle to access a small loan elsewhere without paying extortionate rates of interest.

Over the last 12 months, we have helped hundreds of members who have been affected by the pandemic by offering payment holidays, reducing payments on loans and most importantly, keeping in touch with members so they know we are there for them to help them through this difficult time. Members who need to borrow from us are encouraged to save a small amount each week whilst they are repaying their loan, which helps them become more financially resilient for the future.

There can be no doubt that financial worries are one of the main causes of stress and it is becoming increasingly evident that this can translate into how an individual performs at work.  The impact of poor financial health can lead to a lack of productivity and absence from work. So how can responsible employers who care for their staff help them to build financial resilience?

Recent research by the Chartered Institute of Payroll Professionals (CIPP) has found that 55% of employees would like a savings and borrowings solution provided by their employer.  Sadly, many businesses do not offer such a solution but we can help as we provide a payroll service for local businesses called BEESMART.

This is a free benefit with no risk to employers. Staff are encouraged to save regularly by having a sum of money deducted from their payroll. We will place the funds into a savings account on their behalf and also provide free life savings insurance on those savings. Saving directly through your pay is proven to make it easier to save regularly and having something put by for a rainy day can reduce financial stress which will in turn have a positive impact on the wellbeing of employees.

Staff will soon see their savings grow and have the comfort of knowing that their savings are covered by the Financial Services Compensation Scheme.  An additional benefit is that once employees are saving, we can then provide affordable loans which can often be more competitive than High Street Banks and payday or doorstep lenders.

BEESMART is a simple, safe and flexible scheme which will help people get back into a savings habit and there is no cost to an employer to set it up. We would encourage any local employer to contact us so we can help you support your staff.

We are on a mission to help our local community through the services we offer, and make people better off.

For further information on the services offered by Manchester Credit Union, please visit our website

If you are an employer in the Greater Manchester area and are interested in the BEESMART payroll service, please visit this webpage or email for further information on how to set it up free of charge.

Manchester Credit Union logo for GM Poverty Action

 

 

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Managing finances research

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How do those aged 30-50 in zero-hour, self-employed, or temporary work manage their finances?

Researchers at the University of Manchester are looking at how individuals have fared financially during the Covid-19 pandemic, and what impact they feel the pandemic has had on their finances.

They would like to interview individuals currently working within gig-economy roles – on self-employed, zero-hour, or temporary contracts.  Ideally, they are seeking people who work in social care, hospitality, delivery, health and fitness, or office administration (although respondents from other sectors would be welcomed). In particular, the researchers would like to speak to individuals aged 30-50 who are earning roughly between £12,000-£20,000 per annum and living in Greater Manchester or the surrounding area.

The research team is especially interested in understanding how people in this kind of work manage their financial situation in the absence of benefits from an employer such as full-time hours, sick pay, maternity pay, and pensions.  They believe that working in a more precarious situation places an increased level of personal or financial risk on people that in other kinds of work would be shared with an employer, and they want to know how people feel about that.

The research team are working in collaboration with NEST pension scheme.  They want to help contribute to raising awareness to the inequality’s workers on these contracts face, and what this means for them in terms of financing their later lives.

You can find out more information about the research here. To take part in an online Zoom or Skype interview please contact Kris Fuzi

 

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Turn2us

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Turn2us publish an Impact Report and launch a new Benefits Calculator

Turn2us, have released their first Impact report, which has a particular focus on the charity’s response to Covid.

The 2020 Covid-19 pandemic has had profound effects on the UK economy and caused many people to experience severe disruption to their employment and personal finances.

Since March 2020, 11.4 million people have been placed on furlough, 2.2 million more people are now claiming Universal Credit due to the pandemic and 693,000 people have been made redundant.

While certain groups have seen their income and livelihoods particularly affected – including women, single parents, younger people, and people from minoritised backgrounds – the effects of the pandemic have been felt throughout UK society.

This Impact Report tries to highlight this inequality while demonstrating the impact we’ve had on people’s lives.

Please do not hesitate to get in touch with the External Affairs team  or other members of the charity’s team if you have any questions, or would like to talk about how we might work together.

Also, after two years of work with users and stakeholders from across the sector, Turn2us have launched a new Benefits Calculator in order to help millions of people every year to understand the welfare benefits they may be able to claim.

Turn to us 7 million graphic for GM poverty Action
To support the launch of our new Benefits Calculator, Turn2us undertook new research which showed that:

•    More than 7.1 million people are missing out on £15.1bn of benefits
•    45% of people have never checked to see if they can claim benefits

More information about Turn2us

 

 

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Covid-19: Half a million miss out on UC

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Confusion and stigma: half a million people missing out on Universal Credit as COVID-19 hit

A Welfare at a (Social) Distance study, funded by the Health Foundation, highlights those who were eligible for Universal Credit at the start of COVID-19 but did not claim it – despite often having sharp falls in income and struggling financially.

The report by the University of Salford, working in collaboration with the University of Kent and the University of Leeds, the LSE and Deakin University, Australia, estimates that around half a million (an estimated 430,000-560,000) people who were eligible for Universal Credit during the start of the COVID-19 pandemic did not claim it.

There were many (an estimated 280,000-390,000) people who wrongly thought they were ineligible for Universal Credit. Some people had actively considered applying for benefits and decided they weren’t eligible, but mostly people just had a ‘sense’ that they were not eligible for anything.

There were also a quarter of a million (220,000) people who thought they were eligible for Universal Credit but didn’t want to claim it with 59% stating the perceived hassle of applying and the challenge of figuring out if they were eligible the contributing factor to not applying. A further sizeable minority (27%) didn’t claim Universal Credit because of benefits stigma.

Since the start of the COVID-19 pandemic, income had fallen amongst a majority of those not accessing Universal Credit and to make ends meet, people relied on savings, friends and family or borrowed from banks.

Nearly half reported severe financial strain – either falling behind on housing costs, not keeping up with bills and debts, or not being able to afford fresh fruit and vegetables daily. A further two-thirds were unable to deal with an unexpected expense like replacing a fridge and more than one-in-six had skipped a meal in the previous two weeks because they could not afford to eat (equivalent to 80,000 people).

Those not taking-up Universal Credit also had worse mental health on average than the general public.

Dr Ben Baumberg Geiger, lead author of the report and a Senior Lecturer at the University of Kent, said: “There are probably about half a million people who are entitled to Universal Credit but do not claim it. These people are largely invisible because the Department for Work and Pensions no longer estimates how many people are affected – something we recommend that they start doing for UC, just as they used to do for other benefits”.

“Some of these people say they don’t need benefits – but others don’t claim because they don’t understand that they are eligible, hope that things will get better soon, or are put off by the perceived ‘hassle’ or stigma of claiming. It is therefore no surprise that many of these people are experiencing poor mental health and financial strain, some of them severely”.

Professor Lisa Scullion on Welfare for GM Poverty Action

Professor Lisa Scullion

Professor Lisa Scullion, Co-Director of SHUSU at the University of Salford and project lead, said: “Overall, the benefits system has responded well to the unprecedented demands which a year of different lockdown measures has brought. However, historic weaknesses remain.

“It is clear that there are relatively high levels of need amongst people who do not claim the benefits that they are entitled to. The Department for Work and Pensions should publish its own ‘benefit take-up strategy’ for the UK as a whole, aiming to ensure that people can claim the rights benefits as quickly as possible, correct misperceptions about the benefits system, and attempt to address benefits stigma”.

Hardeep Aiden, Research Manager at the Health Foundation, adds: “The £20 uplift and temporary removal of sanctions have gone someway to improve the experience of many claimants during the pandemic, but more targeted support and an easing of the conditions for claiming Universal Credit must be implemented.

“This would reduce the stress and anxiety around claiming, helping to improve both mental and physical health among this financially vulnerable group and, crucially, would encourage those who need to claim to do so”.

The full report is available here

 

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Claimants to challenge DWP in the High Court

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Employment Support Allowance claimants to challenge DWP in the High Court

Excerpts from coverage by Osbornes Law and JRF

The High Court is to decide whether it was lawful of the Government not to give nearly 2million people on disability benefits the same £1040 a-year increase that it has given Universal Credit (UC) recipients.

At the beginning of the pandemic the Chancellor announced a £20 per week increase to the standard allowance of Universal Credit, but this vital increase to support was not extended to those on so called ‘legacy benefits’, the majority of whom are disabled, sick or carers.

Two recipients of Employment Support Allowance (ESA) have challenged this difference in treatment by way of an application to the High Court for judicial review. They argue that is it discriminatory and unjustified. The High Court has agreed it is arguably unlawful and will decide the case later this year.

Despite them having an equivalent entitlement to the ‘standard allowance’ of UC, simply because they were in a different part of the system, 1.9 million people on ESA have been without this increase, which many have called a ‘lifeline’, for the last 13 months. Claimants of Income Support and Job Seekers Allowance have also been excluded.

Universal Credit is slowly replacing ‘legacy benefits’ but the process will not be complete until 2024 at the earliest. In the meantime, those on legacy benefits face all the same financial pressures as those on UC, and yet the Government’s Department for Work and Pensions has decided not to treat them in the same way.

William Ford, Osbornes Law solicitor for the Claimants, commented: “This unfairness calls for a properly evidenced justification, particularly as almost 2 million disabled people are disproportionately affected by this decision and the pandemic generally.

“Thus far the Government has failed to provide any objectively verifiable reason for the difference in treatment of people in essentially identical circumstances.”

Helen Barnard, Director of the Joseph Rowntree Foundation, who have been campaigning on behalf of legacy benefit claimants as part of their #KeeptheLifeline campaign said: “Everyone should have access to a strong social security system that protects them from harm when they are struggling to stay afloat.

“Disabled people and carers already face a greater risk of poverty, so there can be no justification for offering them less support than people claiming Universal Credit simply because they are in a different part of the system.

“Discrimination has no place in our social security system and every day we fail to act undermines public trust and intensifies hardship. Ministers must right this injustice by urgently extending the £20 increase to legacy benefits.”

The full press release by Osbornes Law can be read here

For further details of Universal Credit claimants in Greater Manchester, see GMPA’s Poverty Monitor page on Social Security here

 

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Here to Help Campaign

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Raising awareness of the financial and wellbeing support available from grant-giving charities – ACO’s Here to Help campaign

By Hannah Page, Marketing & Communications Manager, The Association of Charitable Organisations (ACO)

ACO logo for GM Poverty ActionAs the Covid-19 pandemic continues, we sadly anticipate more people will be plunged into poverty due to the economic impacts of the crisis as we expect further job losses and redundancies once the government’s Job Retention (furlough) scheme ends. We also expect more people may need mental health and wellbeing support due to the impacts lockdown and long-term isolation has caused.

The Association of Charitable Organisations (ACO), the umbrella body for benevolent funds (charities that give financial support to individuals), is therefore running the Here to Help campaign to highlight the support available from benevolent charities for those facing financial hardship, who may be struggling to afford basic essentials, or are facing mental health struggles during this challenging time.

While people tend to know the big-name charities, many are unaware there are hundreds of these benevolent funds operating throughout the UK to support individuals and their families through offering financial grants or other support services. Grants can be awarded in all kinds of circumstances, and requests are judged on a case-by-case basis, but some of the most common reasons include help paying for day-to-day essentials (food, bills etc.), furniture and white goods, disability adaptions, childcare costs, covering bankruptcy/insolvency fees and more.

Other examples of support awarded throughout the pandemic by these charities include paying for interview clothes where someone was made redundant, support with funeral costs, IT equipment so children could continue studies from home and paying for someone’s internet as libraries closed. Many benevolent funds also provide a range of holistic support services for free to those in need, from counselling services and helplines, online wellbeing materials, to sleep therapy, addiction support and advice services, such as debt or benefits advice.

In terms of finding the right benevolent fund to support someone, most have a certain group they help. Many are occupational funds, supporting those that have ever worked in a certain profession (including former employees) and their families. Many occupations have a benevolent fund, from hospitality workers, retail staff and carers through to architects, bankers and former miners.

There are also benevolent funds specifically for older people, children, disabled people, homeless people and women. Some benevolent charities help those that live in a certain region of the UK and there are general grant-giving charities that will award grants and furniture items to those that don’t fit the criteria of other benevolent funds.

To find the right benevolent fund the Turn2us Grants Search is a simple tool that helps people find support they may be eligible for. By someone filling out a few details about themselves (or behalf of someone), such as location, age and any previous jobs, the Turn2us Grants Search’s database finds all benevolent charities that person could apply for support from.

Hannah Page ACO for GM Poverty Action

Hannah Page

The ACO has also made a short guide to support available from benevolent charities, which is available on its website  to download. The ACO is encouraging organisations working closely with the public to share this guide with individuals that approach them looking for help.

For more information about the Here to Help campaign or the ACO please visit our website or contact Hannah Page (Marketing & Communications Manager) by email or call 020 7255 4496.

 

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Cash Perks

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Innovative solution getting cash to hardship grant beneficiaries

By Gareth Evans, Director, GRE Consulting

The pandemic has focused attention on the importance of local safety-nets in providing crisis grants for struggling households. Many councils have redesigned or reinstated their Local Welfare Assistance schemes to give emergency support for food, fuel and other essential household goods and items.

The recent GMPA report, which examines such schemes across the region, backs the growing calls for a cash-first approach to these hardship grants. It is shown to maximise dignity, autonomy, choice and ultimately impact, compared to the provision of food parcels or vouchers.

A new payment solution, Cash Perks is helping Councils, housing associations and local/national charities overcome the challenges of cash disbursement to those in financial difficulties – especially where clients might not have bank accounts but more commonly are overdrawn.

Gareth Evans, a leading researcher and anti-poverty campaigner who launched Cash Perks explains: “The idea came about when we were helping design an emergency food and fuel scheme for one of the country’s largest housing associations. We recognised the limitations of other payment options to get cash immediately to those that need it, so went out and created a solution.”

ATM photo for cash first for GM Poverty ActionThe technology enables organisations to securely send payments between £10 and £500 to their beneficiaries by SMS text message. Recipients can instantly collect their allocated funds 24/7 at over 17,000 ATMs nationally – all without the need for a card or bank account.

One local authority that has already embraced the facility is London Borough of Barking and Dagenham, which originally piloted it to send hardship payments for those without bank accounts. But following its success, the Council has just used it to disburse almost £250,000 of its Covid Winter Grant Scheme allocation in individual payments to its approved households. “It’s really straight forward and it’s a fast, efficient, flexible system that supports us to implement frequently announced new government initiatives,” explains Donna Radley, Head of Benefits. The Council’s Children’s Services directorate has now adopted it to replace the myriad of petty-cash payments that it makes to clients.

Anthony, one of the recipients of the Councils support explained the difference the emergency cash payments had made, “This has literally saved my life. I have had such a bad couple of years and this went some way to helping me eat properly and getting myself back to myself after the death of my son in 2019 and losing my job and then lockdown. I can’t thank you enough.”

With no setup costs or monthly charges, just a fixed fee per transaction based on the amount sent and usage volumes, it enables organisations of all sizes to access the innovative technology.

Wimbledon Guild, a small benevolent charity that operates in South London has used Cash Perks to continue offering its small emergency grants throughout Covid despite its offices being closed. Vanessa Robins, the charity’s Welfare Manager says, “It is a fast and convenient way to get cash urgently out to clients at little cost to the charity, especially for those without access to a bank account or who have overdrafts where transferred cash would be swallowed up.  It reduces admin time and fewer staff need to be involved in the transactions, although there is a strong audit trail.”

Find out more here.

 

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Childcare costs

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Childcare costs rise as providers struggle to remain sustainable during the pandemic

By Hannah May Parlett, Coram Family and Childcare

Britain’s parents are paying 4% more for childcare for children under two, and 5% more for children aged two than they were one year ago, according to the country’s most comprehensive annual survey of childcare costs. Coram Family and Childcare’s 21st annual Childcare Survey finds that parents have faced childcare costs rising well ahead of inflation and are now paying an average of £138 per week – over £7,000 per year – for a part-time nursery place for a child under two (in the North West the figure is £126.43).

Childcare providers are struggling to remain sustainable during the crisis, with 39% of local authorities in England seeing providers in their area raise their prices and 32% reporting that some providers have reduced the number of free early education entitlement places they offer. Furthermore, 30% have seen providers increase the number of children looked after by each staff member.

Despite over a third (35%) of local authorities in England reporting a rise in the number of providers in their area permanently closing in the last year, the majority have not yet seen an increase in shortages of childcare. Over two-thirds (68%) of local authorities in England reported having enough childcare available to meet demand for parents working full time, compared to 56% last year. However this is most likely to be due to decreased demand from families during the pandemic, rather than increases in the supply of childcare, and it is yet to be seen whether there will still be enough childcare places if, and when demand returns to pre-pandemic levels.

In addition, availability of childcare for certain groups is little improved on last year, with less than one in four local areas in England reporting enough childcare for 12 to 14 year olds (13%), parents working atypical hours (16%) and disabled children (25%). These shortages for disabled children exist despite the fact that fewer disabled children are using childcare – a third (31%) of local areas thought that fewer children with special educational needs and/or disabilities (SEND) were using childcare than last year.

Coram logo for GM Poverty ActionMegan Jarvie, Head of Coram Family and Childcare, said: “The pandemic has reminded us all of the vital importance of childcare, in enabling parents to work, boosting children’s learning and narrowing the gap between disadvantaged children and their peers. However the crisis has also exacerbated the issues that exist in the sector. For too many families the system simply isn’t working, and they are left struggling to make work pay after childcare costs or are forced out of the workplace entirely.

“There remains a risk that many providers could close, leaving more families struggling to find the childcare that they need, or that costs could further increase, at a time when family finances have already been stretched by the pandemic. Financial support from the Government has helped childcare providers to stay afloat, but we don’t know what the effects will be when this support ends. We’re calling for the Government to take urgent steps to improve the system now and in the longer-term so that every child can access the high-quality childcare that supports their early development.”

The Childcare Survey 2021 sets out actions that governments can take in the short-term to fix urgent problems in the system:

•  Launch a funding review for the free early education entitlements to make sure that funding levels are sufficient to support the delivery of high-quality education and care, including, but not limited to, issues resulting from Covid-19.

•  Reform Universal Credit so it does not lock parents out of work, by increasing the maximum amount of childcare costs paid under Universal Credit and move to upfront payments for childcare.

•  Extend the 30 hours free childcare provision for three and four year olds in England and Wales to families where parents are in training, to help boost their employment opportunities.

•  Double the early years pupil premium, to boost outcomes for the most disadvantaged children.

•  Re-allocate any underspend budget for Tax-Free Childcare to other parts of the childcare system – prioritising the most disadvantaged children.

For a copy of the full report please contact Emma Lamberton, Communications Manager, Coram.

 

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Strengthening local welfare provision

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Next steps

By Graham Whitham

In December, GMPA launched our Strengthening the role of local welfare assistance report. The report identifies good practice and recommendations from across the country and considers how these can be applied to local welfare assistance schemes here in Greater Manchester.

Local welfare assistance schemes are an important means through which local authorities can respond to the needs of residents facing a financial crisis. Relatively small interventions delivered through these schemes can help meet a person’s immediate needs and prevent them from falling deeper into hardship. However, national research has found that there’s often a lack of awareness of schemes, that they are poorly advertised and difficult to access.

In Greater Manchester, where all local councils have schemes in place, there is some existing good practice and a real opportunity to strengthen support in each of our boroughs. Taking the recommendations detailed in the report, GMPA has developed a checklist for local authorities and their partners to use to assess their schemes and understand what further improvements could be made. Importantly, at a time when local authority finances are coming under even greater pressure, most of the recommendations come at no extra cost.

We are pleased with the engagement we’ve had on the report to date. This month we held events for elected members, council officers and other stakeholders from across GM, and we’ll continue to work with councils and their partners over the course of this year.

Of particular relevance as we (hopefully) begin to recover from the pandemic, is the focus in the report on taking a ‘cash first’ approach to supporting people. This means that the default way in which someone facing hardship is supported is through a monetary payment rather than in-kind support such as a fuel voucher or food parcel.

Local welfare assistance schemes represent an obvious opportunity for local authorities to adopt this approach as a key role of schemes is to support residents with essential living costs for those in financial crisis, such as buying food or heating their home. Whilst most of the schemes in Greater Manchester offer this support, it is usually in the form of vouchers.

There has been a range of research highlighting the benefits of cash payments over any other form of support for those in financial crisis due to its:

a) Flexibility, choice, speed and convenience – vouchers have to be used with certain companies or certain locations or for certain products; cash can be used anywhere and if issued electronically, is available immediately. Vouchers may mean someone having to travel a distance to buy food, costing them money and time, when they could have used their local shop if they had access to cash, benefiting the local economy. There is a much greater risk that vouchers won’t be used compared to money.

b) Preservation of dignity – having to use vouchers can be stigmatising and may reduce access to the support that residents desperately need.

c) Administrative efficiency (when processed electronically) – once an electronic system is set up to pay cash it can be processed quickly and remotely, without the need for face-to-face visits. This approach removes the need to make arrangements with third parties (e.g. voucher providers) further reducing administrative pressures.

Graham Whitham, CEO GMPA for GM Poverty Action

Graham Whitham, CEO GMPA

Adoption of a ‘cash first’ approach by local welfare assistance schemes across Greater Manchester would help contribute to addressing the atomisation of poverty that we’ve seen over the last ten years. You can read more about the importance of this approach in our ‘Cash first’ briefing and in the Strengthening the role of local welfare assistance report.

 

 

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Manchester Credit Union reaches a milestone

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Press release

Savings and loans provider Manchester Credit Union has reached a milestone of £12.5million savings by its Mancunian members as it celebrates its 30th anniversary.

Starting up as Beswick and Openshaw Credit Union in 1991, it evolved into Manchester Credit Union and now serves 32,000 members across the city, as well as Bury, Rochdale, Tameside, Trafford, and the High Peak.

The credit union, a financial co-operative that is owned by its members, has seen demand for their services rise since the pandemic hit, as the city’s residents turn to local, ethical and affordable loans and savings products.

Chief executive Christine Moore said “When I first joined in 2000 there were 103 members and I was the first, and only, paid member of staff.

“Today we have more than 32,000 members and all day-to-day transactions are handled by a fantastic team of 23 staff. We estimate that we save local people in excess of £5million in loan interest each year, compared to doorstep and other high-cost lenders. When they borrow from us, we actively encourage all our members to save with us by transferring a small amount of their loan repayments into a savings account to help them build up a pot of savings for a rainy day.

Manchester Credit Union for GM Poverty Action

Christine Moore

“More and more Mancunians are turning to us as they look for an organisation that really cares about them and their city – and it keeps money in Manchester, rather than in the pockets of external shareholders.

“We would not be where we are today without the unfailing support and hard work of the staff, directors, and most importantly the volunteers from all the pioneering credit unions who are now part of the Manchester Credit Union family.”

For more information about Manchester Credit Union please visit their website

 

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