Black Country workers urged to save with credit unions.
A new campaign has been launched to improve the financial health and resilience of employees across the Black Country and encourage workforce savings through credit unions.
The campaign, called #PaydayYourWay, aims to encourage staff to save regularly, help them manage their money and keep them out of the clutches of loan sharks.
The partnership involves the England Illegal Money Lending Team (IMLT), Black Country Chamber of Commerce, and Just Finance Black Country, along with four local credit unions (Wolverhampton City Credit Union, Walsave, Castle & Crystal and 6 Towns), working together to promote savings through payroll deduction.
Credit Unions offer access to safe and legitimate financial services, helping to reduce the risk of people going to illegal money lenders who often target the financially vulnerable.
Black Country Chamber of Commerce are encouraging employers and businesses to sign up to a payroll deduction savings and loans scheme through a credit union.
Chamber Chief Executive Corin Crane said: “We are pleased to support the launch of the Payroll Savings campaign and offer this free service to businesses, which can improve the financial wellbeing and productivity of their staff in the workplace.
“It’s important that we help people to save and build up their financial resilience, protecting them against future unexpected events and falling into the trap of unscrupulous loan sharks.”
The payroll deduction scheme allows employees to save regularly or pay off an affordable low-interest loan directly from the wage packet.
The scheme provides employees with greater financial stability as they can build up their savings and access low-cost loans should they need to borrow.
Wolverhampton City Credit Union (WCCU) currently has 16 payroll partners signed up to the scheme and credit union members who save directly from their salary have amassed nearly £250,000 during the pandemic.
WCCU’s Chief Executive Rob Shearing said: “Employers know that their staff could face a tough few months financially – so it makes sense for them to encourage employees to save and borrow responsibly at work.
“The scheme can be set up in minutes and is virtually cost-free for the employer. Most important, having money put aside cuts money worries and helps employees keep their minds on the job.”
All money saved in a credit union is protected by the Financial Services Compensation Scheme up to the value of £85,000 per person.
26% of UK adults have little or no savings. This means that when an unexpected bill arrives or a family crisis occurs some households may be vulnerable to high-cost lending, including loan sharks.
Tony Quigley, Head of the England Illegal Money Lending Team, said: “The Covid-19 pandemic has highlighted the importance of financial resilience to deal with unexpected life events.
“We welcome the launch of this campaign and encourage businesses to set up a payroll deduction scheme for their employees that provides them with easy access to savings and affordable credit.
Continued economic uncertainty during the coronavirus pandemic means loan sharks may look to take advantage of people in a vulnerable position who feel they have nowhere to turn for help.”
Mr Quigley added: “We are urging victims of illegal money lending to recognise that they are not alone, and to come forward to seek support by calling our 24-hour helpline.”
Just Finance Foundation is a financial inclusion charity helping to improve practical skills for people to manage their money well, such as saving more money and getting out of debt.
Rev Cassius Francis, from Just Finance Black Country said: “We are really pleased to support the payroll savings campaign with our credit unions across Dudley, Sandwell, Walsall and Wolverhampton because our aim is to support people and communities to thrive and flourish. At Just Finance Black Country we want to promote a culture of regular saving – it doesn’t have to be a lot, but we know regular saving can make a difference. If we can promote a culture of regular saving from our earned income it will help us to be better prepared for financial shocks in the future.”
For information on how to become a member of your local credit union, speak to your employer or visit www.findyourcreditunion.co.uk.
To report a loan shark, call the 24 hour helpline on 0300 555 2222 or complete an online reporting form at www.stoploansharks.co.uk.