New credit union service launched for Armed Forces

Defence Secretary Michael Fallon announced a credit union has been launched which will provide support for Armed Forces personnel, enabling them to access safe and affordable finance.

Fallon said: “The government’s commitment to the covenant remains unshakeable. Today we go even further by launching a credit union for our Armed Forces personnel.

“By paying a regular amount from their salary directly into the credit union, they will be able to avoid the struggle for credit approval and the siren call of the payday lenders.”

The credit union services will offer the Armed Forces an easy alternative to banks, building societies and payday lenders. This will increase the choice available for savings and loan facilities.

In the past, some members of the Armed Forces have struggled to get credit approved as a result of moving regularly and not being able to build up appropriate credit ratings. Some troops have also been targeted by payday loan companies.

Armed Forces will be able to save money and pay off loans as a result of the credit union and through ‘payroll deduction’. The new initiative will see the payment come directly from an individual’s salary or pension at source.

Mark Lancaster, Minister for Defence Personnel and Veterans, said: “I’m delighted that credit union services will today be available to Armed Forces personnel. It is crucial that those service people who work so hard to keep Britain safe, both at home and abroad, can access easy and affordable ways to save and borrow.

“This helps to tackle an issue that has caused disadvantage and disappointment to some service members.”

HM Treasury announced in March that the government would provide £500K from non-MOD LIBOR funds to support Armed Forces personnel access credit union services. The funding will be used to develop the system to allow payroll deductions for credit union payments by service personnel and those in receipt of a pension.

Economic Secretary to the Treasury Harriett Baldwin said: “I am delighted that armed forces personnel will now be able to save with credit unions directly from their salary or pension.

“Military personnel have long faced difficulties accessing credit due to the mobile lifestyles required by their jobs, and it is right that we use bank fines collected from those who’ve demonstrated the worst of values to support these military personnel who have served their country and shown the best of British values.”

The credit unions involved include, PlanSaver credit union, Police credit union and London Mutual Credit Union. Each union will work collaboratively to offer the service.