Affordable borrowing and saving Challenges and solutions from contrasting Credit Unions….. Sally Chicken Rainbow Savers Mirca Moreira Circle Housing Money

What is a Credit Union? Credit Unions are financial co-operatives offering an alternative to high street, doorstep and high cost lenders Credit Unions are regulated and protected by: Financial Conduct Authority (FCA) Prudential Regulation Authority (PRA) Financial Ombudsman Scheme (FOS) Financial Services Compensation Scheme (FSCS) You can recommend a Credit Union without any worry about being viewed as a financial promoter

Head Office: 229 London Road South, Lowestoft, Suffolk, NR33 ODS Peterborough Shop: 3 Cattlemarket Road, Peterborough, PE1 1TW Website: Fenland: Oasis Centre: St Michael's Ave, Wisbech PE13 3NR, Thursday 12-2pm Rosmini Centre: 69A Queens Rd, Wisbech PE13 2PH Tues 2-4pm Barclays Bank: Wisbech by appt Local Cambridge groups: City Centre: Mandela House, Regent St, Mon & Thurs 11-1pm Cherry Hinton: Baptist Church Family Centre, off Fishers Lane, Tues 2-4pm (temp closed for refurbishment) Histon/Impington: St Andrew’s Café, School Hill Histon CB24 9JE Fri 11am -1pm

Who do we help – Rainbow Savers – People who have been refused a bank account – People who have a post office card account – People whose basic bank account is so limited it is no use to them – People with inadequate ID/Address documents – People with literacy limitations or mental health issues – People with chaotic lifestyles i.e. homeless or substance abuse – People who have a finance related criminal record – People who have a current or previous DRO or bankruptcy – Anyone who wants an alternative to a bank account – People who want a small loan alternative to a doorstep lender or predatory lender

Our main services – Rainbow Savers Budgeting and Savings accounts: Xmas Club, Junior Savers, Jamjar Budgeting accounts Group accounts Cheque processing at no charge Housing Benefit Processing Wages or DWP benefit processing Pre-paid Visa Debit Card Loans of up to £2,000 (average £300) Local training to volunteer groups

Circle Housing Money – who do we help? Circle Housing Money (CH Money) is our partnership between Circle Housing and Leeds City Credit Union (LCCU) It supports the delivery of a consistent package of affordable financial services, including savings accounts, affordable loans and alternative banking products, to customers and colleagues, no matter where they live Available to Circle Housing customers, Centra Care and Support customers and Circle Housing (and Centra) colleagues Supports Circle’s mission of enhancing life chances – support customers to live independently and be more financially resilient.

Credit Unions support people towards financial resilience Confident managing money (confidence, knowledge, skills, motivation, ability to make informed choices) Less stressed about financial situation or money issues More able to deal with financial shocks Able to meet outgoings (Including rent) Able to meet aims & aspirations – life chances (e.g. support back to work, skills, education, health)

1,300 Circle customers have incurred a bank charge in last 12 months 57% Circle customers who prefer to use cash to pay for things 63% Circle customers say they don’t know how they would cope with less money 30% Circle customers say thinking about their finances keeps them awake at night 4% Circle customers are without a bank account 38% Circle customers save regularly 34% Circle customer borrowing in last 12 months came from high cost credit sector 35% Circle customers have incurred a bank charge in last 12 months 30,762 People sought help with payday loans between Jan – June 2013, nearly the same amount as for the whole of 2012 (StepChange)

What products does CH Money offer? Savings Accounts Membership Account Christmas Club Regular Saver Loyalty Saver Young Saver Transactional Banking Products Current Account Bill Paying Account Pre-paid Card Affordable Loans Affordable and Responsible Loans

Instant Savings Accounts – comparing services CH Money Membership Account Basic entry level, instant access savings account, which every adult member gets £5 automatically gets deposited into this account on joining To use the Membership account members need to save £13 per month if they earn a wage, or £5 per month if they are unemployed Rainbow Saver Membership account £2 in account at all times No minimum saving requirement

Savings compared (cont.) CH Money Christmas Club Account Lets you save as much or as little as you want throughout the year Customers can save from January to October and get access to their money on 1st November Rainbow Saver: Christmas Club account Save minimum £2 per week Many members choose more No restrictions on deposits or withdrawals Minimum opening amount is £2 Funds released on 1 st November

Affordable and responsible Loans CH Money You can apply for a loan once you a member of Circle Housing Money. The amount customers can borrow will be based on how much they can afford to repay, from £100 to £15,000. As a credit union, interest rates are capped at a maximum of 42.6% APR, each loan is assessed on individual merit and appropriate interest rate applied. The interest on loans is calculated on a daily basis so as you pay back the money, the extra you have to pay goes down too. And there's no extra charge if customers decide to pay back the loan earlier than expected. Rainbow Saver Exactly the same except maximum loan is £3,000, rates vary from 12.7% APR to 42.6% APR No set up fees and no hidden charges

Flexible Banking CH Money Current Account Will receive income from wages, pensions or benefits e.g. UC payments Customers can withdraw cash from ATM’s and can upgrade to a debit card after 3 months Quarterly statements and customers can keep track of their money online Transparent banking so we are clear about monthly fee and small charges that apply to this account: Rainbow Saver does not have a current account, uses the pre-paid VISA Debit card service instead

Flexible Banking (cont.) CH Money Bill Paying Account This is an excellent budgeting tool for customers who want help with managing their money when they move onto Universal Credit : Customers pay in a fixed monthly amount to cover the cost of agreed bills like rent and then they are paid for them to make budgeting easier Bills can be set up to be paid either weekly or monthly £2 monthly fee and 5% is added in case any bills go up unexpectedly Rainbow Saver Jamjar accounts Chosen by member, some choose lots with different names, some just choose a generic one. Member needs to show bill for the customer ref number to be put on our computer for ease of payment No charge for paying out to creditors Bills paid on request by or post or phone call, or set up to pay a set amount each week/month

Flexible banking CH Money Pre-paid Card Allows you to withdraw cash from ATMs or buy things in shops or online and get cashback Customers choose how much to load onto the card  Customers can check their balance by phone, text or online No overdraft facility so there are no charges for going overdrawn There are small charges that apply to this account Rainbow Saver Pre paid card Any income can be paid in i.e. wages, DWP benefits including UC, cheques, cash using PayPoint card or local access point. Online access to pre-paid Debit card spending, can check balances by phone or text message to Very low cost of card, 50p per load, 75p to use ATM but instore cashback is at no charge, online shopping no charge From 2016, 25p per week account charge

CH Money New Tenants Package Offering membership, small loans to cover settling in & household appliances and budgeting accounts & encouraging saving where possible Partnership in place between LCCU and Coop Electrical offering discounted new white goods and other household appliances Innovation……some examples Rainbow Savers Life insurance In discussion at present with a not- for-profit company to offer a lump sum pay-out in the event of death, available to year olds Annual charge estimated to be £15 for £5,000 pay-out We expect to tie this in with a Funeral Jamjar for people over 55 to start saving towards a funeral bond to purchase at age 65 when they reach the age limit

Any Questions?