Watchdog calls for UK’s Post Office to offer credit union banking
UK consumer advocates Consumer Focus are today calling for credit unions to offer their financial services through Post Office Ltd retail counters. The national group has issued a report based on surveys of nearly 4,000 adults a third said they would be interested in joining a credit union, though two in three of those interested believed there was not a credit union nearby.
Almost half of all consumers surveyed said it would be more convenient accessing credit union services through the UK’s 11,800 post offices.
Credit unions are non-profit financial services providers that are owned by their members, offering banking services and loans but with account holders having direct influence over how the organisation itself is run, and have a tendency to offer more competitive credit and promote an agenda of supporting the community.
The Consumer Focus report, entitled “Credit where credit’s due”, argues that the Post Office network would “significantly” boost its status as an alternative to banks’ shrinking networks of retail outlets providing credit union services, and would “plug a credit gap” particularly for low income consumers.
The surveys, carried out for Consumer Focus by TNS Omnibus in 2011 and GfK in 2012, found that four in 10 consumers on low income would be more likely to open a credit union account, or apply for credit union loans, if they were available at post offices.
Half of these said this was because post offices were more available locally to them, while just over a third of them said their interest in credit union services would be tied directly to the trust they have in post offices.
Less than a third of consumers on low and middle incomes said they were sufficiently satisfied with High Street banks in the UK such that they would not consider other options like credit unions.
Access to credit
Andy Burrows, head of post office services at Consumer Focus, said today that adding credit union services to Post Office counters would fit with the government’s agenda of expanding access to credit among millions of UK people on low incomes, particularly where credit unions themselves cannot afford to establish their own branches.
“Marrying credit unions and post offices creates a situation where everybody wins,” said Burrows. “Credit unions would benefit from greater access and awareness, customers would get more convenience and alternatives to high street banking, and it would also give a shot in the arm for the post office network.
“The Post Office brand is trusted and could help boost confidence in, and take-up of, credit union services.”
Government figures suggest 1.7m people within low income groups do not have a bank account, while 7m are forced to use high-cost credit because they are limited in the banks available to them.
According to the Association of British Credit Unions, around 8m UK adults were unable to access credit unions in 2010 because of their limited geographical coverage.
“Strong case”
Britain’s major communications industry union CWU said today that the Consumer Focus research offered a “strong case” for making credit union services available through the post office network.
The biggest postal union in the UK said the surveys also reinforced the case for a Post Bank to offer “trusted, comprehensive” banking services across the country.
CWU general secretary Billy Hayes said: “The post office network is an ideal retail outlet for banking services as the postmasters who run them are well trained business people with strong community ties.
“We believe that credit unions and a Post Bank could help to move vulnerable households away from dependence on loan sharks and payday loans which attract high interest, instead giving them access to regulated and trusted banking services. At the same time, such a link-up would secure jobs in the Post Office and help to maintain the country-wide post office network,” added Hayes.
