Not-for-profit community bank Wolverhampton City Credit Union is warning that more struggling families could feel tempted to turn to high interest lenders and loan sharks to fund Christmas this year.

 

Manager Matt Goulding has called on community and voluntary sector groups to alert local people to the risk of getting into problem debt.
He said: “it’s still 10 weeks to Christmas, but already, people are feeling the pressure to spend. A survey of our members has shown that 21 per cent are feeling ‘very stressed’ about Christmas with around 45 per cent worrying about how they can afford to pay for the festivities.
“Around 40 per cent said there is far too much pressure to organise the ‘perfect’ Christmas. Most parents worry about keeping their children happy. It’s thought families will spend an average of £800 on Christmas though our members say they’re planning a more modest budget of between £250 and £500.
“At the same time, people are facing rising prices, falling wages, cuts in benefits and the roll out of Universal Credit. Given these financial pressures, more could be tempted to turn to payday and doorstep lenders and the rent-to-own stores who all charge high interest rates. Worse, some could feel forced to turn to loan sharks.”

The credit union is mailing out a Christmas Survival Kit with advice to members on how to draw up a budget for Christmas, to make savings, to resist the pressures to overspend and to spread the costs through low interest loans.
“We’re saying to our members, whatever you do, don’t go near the high interest lenders to pay for Christmas. You’ll be left with a massive financial hangover in the New Year.”

Last year, the credit union saved its members £145,000 on high interest loan repayments – and plans to help more people save more money this Christmas.
“We’d urge people on low incomes or those with a less than perfect credit history to turn to us first. We hope that voluntary sector organisations could also signpost their service users to us too. We encourage all our members who borrow from us to save a little too so they start building up their financial resilience.
“We treat every loan application individually and will only lend what people can afford to repay. Some high interest lenders are nowhere near as scrupulous: they’re in the business for big profits.”

People who live or work in a WV postcode area of Wolverhampton or South Staffordshire can join the credit union for free online at www.wccul.co.uk/join or visit its branch at 75 Worcester Street, Wolverhampton.

Founded 15 years ago, WCCU is a not-for-profit community bank owned and controlled by its nearly 8,000 members and run by volunteer directors who are elected from and by members. The income it generates through ethical, affordable lending is used to meet its operating expenses, build reserves and pay savers dividends wherever possible.

WCCU is authorised by the Prudential Regulation Authority and authorised and regulated by the Prudential Regulation Authority and the Financial Conduct Authority who regulate all the banks and building societies. It is also a member of the Financial Services Compensation Scheme (FSCS) and holds a Consumer Credit Licence that is registered with the Financial Conduct Authority.

The credit union offers competitive rates of interest on its loans from 6.1 per cent APR to 34.9 per cent APR depending on size of loan, term of repayment and circumstances.

For further information, call Matt Goulding, manager, on 01902 572340 or email contactus@wccul.co.uk

www.wccul.co.uk

 

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