York Cost of Living Crisis: help to stop loan sharks

With more people seeking support from credit unions, new data shows 48,000 in York - more than a quarter or 27 per cent of the adult population of York - are living in financially vulnerable circumstances, sparking fears of a dramatic rise in those being exploited by loan sharks and high-cost lenders.

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The latest figures come from financial inclusion body Fair4All Finance, which has launched the first national campaign to raise awareness of credit unions and community lenders as an alternative to payday and illegal lenders.

For the 47,920 adults identified in York, being financially vulnerable means that due to personal circumstances such as poor health, experiencing negative life events, low financial resilience or low capability, they are unlikely to access mainstream finance.

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Now Fair4All Finance is urging anyone worried about their finances to contact their local credit union or community lender, such as York-based Community First Credit Union first, alongside making sure they are claiming the correct benefits to help with the cost of living crisis. Community First Credit Union’s membership is growing as it expands to help more local people with the cost of living crisis.

Dr Gary Simpson, chief executive of York’s Community First Credit Union, said: “We would like to encourage all York residents to explore the support on offer to them from the community finance sector. Community First offers banking accounts, saving plans and services including affordable, ethical loans, helping to save our account holders money on the cost of borrowing, assistance which more critical than ever now with the rising cost of living affecting so many.

“We would also encourage anyone working, or on benefits, or a mixture of both who needs assistance, or just further information, to contact Community First (online: www.communityfirstcu.co.uk, or via its own contact centre by phone on 03030300010).”

Dr Gary Simpson, chief executive of York's Community First Credit Union (Image: UCG)

Lauren Peel from Fair4All Finance said: “Credit unions and community lenders have decades of experience in supporting households across the UK to save and borrow. They are experts in lending responsibly, whether that’s to people who are well off or to those in vulnerable circumstances. They will be a key sector as we go through a distressing cost-of-living crisis and lenders such as these could be vital resources as local people try to navigate this difficult time.”

An alternative to high street banks, local credit unions assist households in a range of financial circumstances to afford essential items or cover unexpected expenses, as well as helping them to build their financial resilience. They are not-for-profit and will only lend if it’s the right thing for an individual’s finances and help them to consider other options if a loan isn’t the right choice.

The campaign has also been backed by The England Illegal Money Lending Team which operates as Stop Loan Sharks in the city.

Cath Williams from Stop Loan Sharks said: “We are proud to support the vital work of Credit Unions and other community lenders across the country as they help build financial resilience in communities and increase access to fair and responsible finance, particularly for those excluded from mainstream services.

“Loan sharks are currently preying on people’s desperation the region right now and offer nothing more than a vicious cycle of debt and misery in return.”

Cath Williams from Stop Loan Sharks (Image: Stop Loan Sharks)

If you are looking for a credit union near you, please visit: FindYourCreditUnion.co.uk.

There are other community lenders who are mostly not for profit, and who reinvest any surpluses into serving customers who are in financially vulnerable circumstances, which can be found on FindingFinance.org.uk.