LONDON–The U.K.’s Department for Work and Pensions (DWP), one of government’s largest departments, has launched a credit union for staff – the first credit union scheme for civil servants.
Around 85,000 DWP employees will now be able to start automatically saving part of their salary into a credit union savings program, according to TheNews.coop.
DWP has set up a payroll scheme with three of the U.K.’s leading credit unions – Commsave, Hull & East Yorkshire and Voyager Alliance – which will offer a range of ethical financial services to all DWP employees, including budget support and responsible lending, TheNews.coop reported.
The new credit union was announced in a speech to the credit union sector in parliament by Welfare Reform Minister Lord David Freud, who pledged his support for credit unions and encouraged people to join their local credit union to help the industry grow.
“Everyone should be able to access good quality and affordable financial services and that’s why I am a firm supporter of credit unions,” TheNews.coop quoted Lord Freud, who is a member of the London Mutual Credit Union, as saying. “I’d urge people to consider joining their local credit union. Credit unions need us to be their customers, so they can grow and continue to serve their local community. I’m proud we as an employer are making it really easy for our staff to join one.”
The government has invested £38m into the credit union industry to help it modernize, expand and become financially self-sustainable. In the 12 months to December 2015, credit union membership grew by an average of 5.7%, according to TheNews.coop.
Mark Lyonette, chief executive of the Association of British Credit Unions (ABCUL), said in a statement, “It’s no coincidence that the most successful credit union sectors across the world have developed close links with employers so that saving and repaying affordable loans can be done direct from payroll. Easy access to credit union services isn’t just good news for employees. Research has shown that money worries lead to increased absence and lower productivity, so helping staff save and borrow responsibly is good for business. We’re delighted that the DWP is setting an example for other public, private and third sector employers to follow.”