Credit union survey shows severity of this winter’s cost of living crisis

Almost half of respondents in the Credit Unions of Wales report expect to borrow for essential bills

A new Credit Unions of Wales survey shows the stark reality of the cost-of-living crisis this winter for people in Wales with almost half of respondents expecting to borrow to pay their essential bills.

The survey of 780 people, released to mark International Credit Union Day (20 October), found that 48% expect to have to borrow to pay essential bills such as food, utilities and clothing this winter.

Meanwhile 60% expect the cost of Christmas to impact their ability to pay essential bills, double the proportion seen in previous years.

Related: How credit unions are helping people through the cost of living crisis

“This is the third time we have run this Christmas spending survey and the responses show the impact of the cost-of-living crisis and the way people plan to cope with it,” said Ann Francis, CEO of Cambrian Savings and Loans, Wales’s largest credit union.

“Many people are trying to spread the cost of Christmas, with eight in 10 having put money aside, almost nine in 10 shopping early, and almost 90% setting a budget.

Ann Francis and Robert Jones (right) of Cambrian Credit Union at the Credit Unions of Wales Awards, accepting the award for Access to Financial Services

“However, what’s equally clear is that while people have put money aside and are budgeting, they are equally looking to credit to help them through this period, and there’s a marked increase in people looking to high-cost options.”

More than one in five of the respondents expected to use payday or doorstep loans, a significant rise from just 7% in 2020, and 30% planned to use their credit card or store cards to help fund Christmas, compared to 19% in 2020 and 14% in 2019.

As not-for-profit financial cooperatives, credit unions don’t have huge advertising budgets, but they’re growing in communities across Wales, and that work is being celebrated at the Credit Unions of Wales Awards in Pierhead on 20 October.

Mamadu Djalo at the Credit Unions of Wales Awards

One member who is being honoured on International Credit Union Day for the difference he is making in his community is Mamadu Djalo.

Mamadu joined Cardiff & Vale Credit Union in 2015 after moving to the capital city as an asylum seeker with his family, having fled his native Guinea Bissau in Africa in 1998.

He has since become a community leader and, having been an asylum seeker himself, understands the hardships families go through to find a better life.

Mamadu delivers awareness raising sessions amongst his community about the risk of loan sharks and directs members who need affordable credit to Cardiff & Vale Credit Union.

His work is being recognised with the Credit Unions of Wales Member Making a Difference Award. Cardiff and Vale CEO Leanne Herberg said: “Mamadu consistently promotes Credit Union services amongst his community. He is a true unsung hero, both to his community and the credit union.

“As this survey shows, many people in Wales need the message that Mamadu delivers that credit unions are available to all communities across Wales and offer affordable loans for people in all circumstances including those considering alternatives to high-cost and illegal lenders.”

Survey findings in figures:

  • 780 respondents
  • 51% aged 25-35, 34% aged 36-45
  • 60% male, 39% female
  • 69% credit union members
  • 73% said the cost-of-living crisis was negatively impacting their finances (55% said Covid had negatively affected finances in 2020)
  • 48% expect to have to borrow to cover essential bills
  • 86% were shopping early for Christmas
  • 87.5% had set a budget for Christmas (56% in 2020, 48% in 2019)
  • 79% had saved towards Christmas (53% in 2020, 62% in 2019)
  • 52% expect to spend more on Christmas (14% in 2020, 22% in 2019)
  • 60% expect the cost of Christmas to impact their ability to pay essential bills (33% in 2019, 27% in 2020)
  • 22% expect to turn to a payday or doorstep lender to help pay for Christmas (7% in 2020 and 4% in 2019).
  • 30% expect to use credit/ store cards to help pay for Christmas (19% in 2020 and 14% in 2019).