A new way to access funds when you need it.
Whether it’s budgeting for rent, bills and important payments, or somewhere to save for a rainy day, we already offer a variety of tools and support to put our members in control of their money.
We also recognise that there are financial pressures that come with a busy family life which can put a strain on already stretched budgets. With this in mind, we have created our Family Finance Plan which gives members access to funds as and when they need it, to help spread the cost of expenses like Christmas, back-to-school costs or unexpected bills.
Family Loans have been featured in the press and through the BBC this year, as well as proving very popular with members in other credit unions, so we've looked at how we can introduce something similar.
One thing we wanted to do was to make sure finance was there when members need it most, without having to worry about making a new loan application. To do that we've set it up to work a bit like a credit card or overdraft, so a qualifying member will have a £500 limit that's available to use as needed, and repay using their child benefit.
Unlike a credit card, there's a fixed repayment amount, so the balance will always be repaid in less than 12 months (assuming no further borrowing) and unlike an overdraft, which people can sometimes almost accidentally fall into, members will have to make a conscious decision to use the facility.
We also wanted to help people start to save so the Child Benefit left over after the repayment amount builds up in savings until it's withdrawn, and can provide a small rainy-day fund for the future.
Recognising the limit is fairly low, and that repayment by Child Benefit has proved to be a good method of staying on track for many members in the past. We've also adjusted our acceptance criteria, so that almost anyone in receipt of Child Benefit can qualify, as long as we assess that the borrowing would be affordable so that we can offer this service to more people than ever before.
