A new credit union service has been launched that aims to provide an accessible and affordable source of credit for serving personnel.
Credit unions are owned by their members, with no third-party shareholders. Three credit unions – PlaneSaver Credit Union, Police Credit Union and London Mutual Credit Union – will collaborate under the scheme to provide the best rates and services. The service will also be available for family members and retired personnel in receipt of a pension. Repayments will be made via ‘payroll deduction’, where the payment is taken directly from the borrower’s salary or pension.
The British Legion has raised concerns that many currently serving and ex-military personnel may struggle to access financial products through traditional routes such as bank loans, as frequent relocations can affect credit ratings. British Legion research found that 20,000 younger ex-Forces members had taken out a payday loan in the past year.
Minister for Defence Personnel and Veterans, Mark Lancaster, said of the scheme: “It is crucial that those service people who work so hard to keep Britain safe, both at home and abroad, can access easy and affordable ways to save and borrow. This helps to tackle an issue that has caused disadvantage and disappointment to some service members.”
Economic Secretary to the Treasury, Harriett Baldwin, added: “I am delighted that armed forces personnel will now be able to save with credit unions directly from their salary or pension. Military personnel have long faced difficulties accessing credit due to the mobile lifestyles required by their jobs, and it is right that we use bank fines collected from those who’ve demonstrated the worst of values to support these military personnel who have served their country and shown the best of British values.”