Membership of Credit Unions and loan volumes both set new highs

Membership of Credit Unions continues to rise amid a growing hunt for affordable credit products as the cost of borrowing rises sharply and the cost-of-living crisis worsens, according to analysis of Bank of England data by Freedom Finance, one of the UK’s leading digital lending marketplaces, finds that.

The latest for Q1 2022 finds that 1.93 million people in the UK are now members of a Credit Union, an increase of over 22,000 compared to Q1 2021. Credit Unions are also loaning record sums to members with total borrowing surpassing £1.79 billion in Q1 2022, an increase of £197 million (12%) vs the opening quarter of 2021.Credit Union lending in England has been the major driver of this surge in total UK borrowing, with loans to members rising by £125 million (19% growth) between Q1 2021 (£661 million) and Q1 2022 (£786 million).

David Hendry, Chief Marketing Officer at Freedom Finance, said: “Credit Unions are playing an increasingly important role in the UK’s lending ecosystem. This was accelerated by the withdrawal of many short-term credit providers from the market and demand is continuing to rise as the cost-of-living crisis makes borrowing more expensive and more necessary for many people. But Credit Unions can only be one part of the solution in this economic emergency.

“A strong choice of reputable providers of short-term loans and other credit will be essential to helping people through the current cost crunch. Consumers must also ensure they are making the credit market work for them. This involves shopping around to get the best deal as well as using the latest technology both to ensure they are being matched with the most suitable products and so that they are only presented with credit offers they are eligible for.”