The latest figures from the Bank of England reveal that credit unions across England, Scotland, and Wales have continued their steady growth in membership, loans, and savings.
Data for the third quarter of 2024, released last week, show that total assets for the sector have been steadily increasing over the past five quarters, up 1.01% to £4.93bn.
But total expenditure has grown faster than total income (11.96% vs 8.12%), leading to a decrease in profits from £16.20m to £14.15m.
Although the total number of net liabilities in arrears has decreased by 2.52% to 80,559 between Q2 2024 and Q3 2024, in Scotland it has gone up by 8.77% to 18,551.
Total value of net liabilities in arrears has increased by 6% quarter-on-quarter, to £213.56m.
Meanwhile, the total number of credit union members in Britain has reached a record high of 1,568,726, including junior depositors. This marks a significant 4.2% rise from the previous year.
The demand for credit union loans has also grown, reflecting the ongoing financial pressures faced by many households. The total value of loans increased by 0.49% from Q2/24 to Q3/24, rising from £1.839 billion to £1.848bn – an increase of approximately £9m.
Member savings within credit unions have shown impressive growth. Total credit union shares increased by 0.83% from the previous quarter and have grown by 4.5% compared to the previous year. As of Q3/24, the total share value stood at £2.371bn.
The continued impact of the cost-of-living crisis, coupled with the upcoming energy price cap increase in January 2025, is driving more individuals to seek affordable credit solutions through credit unions, says the Association of British Credit Unions (Abcul).
“These figures demonstrate the resilience and importance of the credit union movement in Great Britain,” added CEO Robert Kelly (pictured). “As more people face financial uncertainty, credit unions provide an essential service – offering ethical savings, affordable credit, and financial education to communities across the country. The continued increase in membership, loans, and savings is a testament to the trust and value that credit unions bring to their members. Now, more than ever, they play a crucial role in ensuring financial wellbeing for millions of people.”
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Richard Pinch, senior director of risk at financial services consultancy Broadstone, told Credit Connect: “This growing demand reflects the importance of institutions that enable access to the mainstream lending sector. This is particularly true for those who feel locked out of the market, including individuals with a credit profile or income status that does not fit with traditional ratings and risk management frameworks.
“Credit unions are one of the country’s best-kept secrets for potential borrowers, providing secure and responsible lending as well as rates that are affordable relative to many other high-cost, short-term options. Another bonus of credit unions is that they offer attractive rates to savers, who also benefit from the knowledge that their deposits are helping to provide loans for other members.
“Moving forward, access to technology such as open banking and increasing integrations with financial services aggregators should support the continued growth of credit unions and enable them to compete against larger lenders.”
