Affordable borrowing and saving Challenges and solutions from contrasting Credit Unions…..

Sally ChickenRainbow Savers

Mirca MoreiraCircle Housing Money

What is a Credit Union?

Credit Unions are financial co-operatives offering an alternative to high street, doorstep andhigh 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 ODSPeterborough Shop: 3 Cattlemarket Road, Peterborough, PE1 1TW

Website: www.rainbowsaver.co.uk

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 11-1pmCherry Hinton: Baptist Church Family Centre, off Fishers Lane, Tues 2-4pm (temp closed for refurbishment)Histon/Impington:St Andrew’s Café, School HillHiston 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)

1,300Circle 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 money30%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

30,762People 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 1st 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 email 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 SaversLife 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 18-65 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?