Manchester’s lowest income families are beating the national average for savings – says Manchester Credit Union.
According to new figures, approximately a quarter of Brits[1] have less than £100 in savings, with as many as one in six having no savings at all. Figures released by Manchester Credit Union this month show its Greater Manchester members are smashing the national average – with £111 in savings.
Manchester Credit Union has been serving the people of Greater Manchester for more than 30 years and is focused on making financial services accessible to low-income households – a group the big banks typically turn away.
The credit union has branches in central Manchester, Rochdale and Wythenshawe and helps families to avoid high-interest payday lenders and loan sharks by offering fair loans, budgeting support, and savings plans that work for real-life circumstances.
The credit union requires members to save as they borrow and carries out affordability checks rather than credit checks. Plus, members on benefits can also borrow – with a portion of their benefits directly allocated to repay their loan.
Mandy Wilcock, chief executive of Manchester Credit Union, said: “Most of our members (66%) are in deciles 1 and 2 of the Index of Multiple Deprivation (IMD), which means they are the lowest income households. These people have traditionally been charged more for credit, locked out of mainstream banking, and left with few choices beyond high-cost lenders. It’s this group which has amassed an impressive £8.8m in savings with us.
“Our requirement for members to save as they borrow has almost certainly helped paint this picture. They’re saving almost without realising and are often surprised how much they’ve amassed at the end of the loan term. It’s an effective way to promote strong money habits and it’s helped many members who had never saved before to change their habits”
A survey of 1,700 Manchester Credit Union members revealed that 27.6% say they struggle with money all the time. Mandy added: “It can be difficult for those with the least to build financial resilience, but the fact that members are exceeding the national average for savings is very encouraging. It suggests they are taking advantage of the financial services available and managing to put money aside, even in a cost-of-living crisis.”
Over the last 12 months[2], Manchester Credit Union has lent £10.7m to its members and has approved 28,563 loans for 15,166 of its 30,000 members. In total, members have saved £8.3m by borrowing from the credit union rather than high-cost lenders[3].
Mandy concluded: “Improving access to fair and affordable lending is the only way to improve financial resilience. Credit unions like us help to improve access to affordable and ethical financial services. Everyone deserves the opportunity to improve their circumstances. Our latest figures really highlight demand and the extent of our social impact.”
As part of Manchester Credit Union’s commitment to building financial resilience across Greater Manchester, it has launched a schools roadshow programme to help children foster a better relationship with and understanding of money from a young age. During the last school year, more than 250 primary school children have participated in Manchester Credit Union’s ‘Bee Smart with Money’ roadshow, which uses well-known fairytale characters to deliver some powerful messages.
Manchester Credit Union is a not-for-profit organisation that exists solely for the benefit of its members in Manchester, Bury, Rochdale, Stockport, Tameside, Trafford, and High Peak. Any profit generated is returned as a dividend on savings or used to improve member services.
