Lancashire residents are being warned to steer clear of loan sharks and high-cost lenders after it was revealed almost 390,000 people in the local area are classed as in financially vulnerable circumstances.
Fair4All Finance, the financial inclusion body which represents the community finance sector, is urging people to make the most of some key sources of support – their local credit unions, other responsible community lenders, local authority guidance information, and free benefits calculators.
A fifth of UK adults had less than £100 in savings even before the current financial crisis and as many as 1.1 million Brits may already be in the hands of illegal lenders, otherwise known as loan sharks. Fair4All Finance fears this number could rise with more financially vulnerable people being drawn into borrowing from unregulated lenders who cause misery with high interest rates and unscrupulous practices.
Credit unions such as CLEVR Money, which serves Preston, Lancaster and the Fylde coast, have been described as a “potential lifeline” by Fair4All Finance. CLEVR Money and other community lenders help thousands of people in Lancashire with affordable credit to cover essentials or unexpected expenses. They also support members to put what money they can aside as savings, even whilst borrowing.
An alternative to high street banks, credit unions can assist all households, regardless of their circumstances, to build their financial resilience. As ethical, not-for-profit cooperatives, they take a responsible approach to lending and will only provide loans if it’s the right thing for an individual’s finances, and will help members to consider other options if a loan isn’t the right choice.
Fair4All Finance is also urging the public to make sure they are claiming the correct benefits to help with the cost of living crisis by using online benefits calculators such as those recommended by the Government. CLEVR Money is also adding a benefits calculator to its website to provide the community with easy access to the information, as part of the organisation’s support of the Fair4All Finance campaign.
Benefits calculators can help households to discover if they are missing out on income to which they are entitled. Fair4All Finance says benefit calculators often help families increase their benefits income by hundreds of pounds a month, and that around £15bn of benefits go unclaimed in the UK each year.
Anthony Brookes from CLEVR Money, said: “We’d urge anyone who is already in receipt of benefits, or somebody who is unsure whether they can claim anything, to check whether they are missing out by using a benefits calculator. In just a few minutes you could find that you are missing out on hundreds of pounds of income each month – and if this means you don’t need to take out a loan from us but can instead keep saving, we see that as a good result.”
Leader of Preston City Council, Councillor Matthew Brown, said: “We are proud that many of Preston City Council’s workforce have signed up to save regularly with CLEVR Money credit union, a not-for-profit savings and loans co-operative. Not only do we want credit union membership to grow internally we actively promote CLEVR with many of our partners and to the wider community.
“CLEVR Money promotes sound financial management by encouraging responsible savings and giving access to affordable low-cost credit. This form of banking is particularly important as we go forward through the cost of living crisis and so we are very glad our staff are able to support the co-operative in this way.”
Cath Williams at the England Illegal Money Lending Team, which operates as Stop Loan Sharks in Lancashire, said: “We are proud to support the vital work of community lenders and Credit Unions 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 right now and offer nothing more than a vicious cycle of debt and misery in return.”
“If you are worried that you may have been targeted by a loan shark, we urge you to take action and contact our team for help. We’ll give you confidential support and help you find a way out of your situation.”
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 are a key sector as we go through a distressing cost-of-living crisis. Lenders such as these, and the benefits calculators available online, could be vital resources as local people try to navigate this difficult time.”
Other credit unions located in the local area include: Blues and Twos Credit Union, Lancashire Community Finance, and First Rate Credit Union. If you are looking to find your nearest credit union, please visit: FindYourCreditUnion.co.uk.
There are other community lenders who are mostly not for profit, and who reinvest any surpluses into serving vulnerable customers, which can be found on FindingFinance.org.uk.
