Credit union for retail workers aims to fend off payday lenders
The retailCURe credit union is backed by several large high street stores and offers loans and savings products. John Lewis and Debenhams are among the high street names backing a new credit union for the retail sector, officially launching today, which aims to help shop workers “avoid the clutches” of payday lenders. Another supporter is former Dragons’ Den star Theo Paphitis, who once again got to say “I’m in”, after revealing that he and his companies have invested a six-figure sum in the not-for-profit enterprise.
Credit unions are financial co-operatives owned and controlled by their members that have traditionally specialised in loans and savings for the less well-off, but are now targeting people of all incomes. They are seen as offering a vital alternative to banks, expensive payday lenders and loan sharks, and the launch of this latest union, called retailCURe, is a big boost for the sector.
Membership of retailCURe is open to anyone aged 16 or over who works in retail or a support industry – a total of 4.5 million people, it is claimed. The retail sector is one of the UK’s largest employers, but is also one of the industries with large numbers of people on low pay. Earlier this year, research showed that the biggest annual drop in advertised salaries was in the retail sector, where the average fell by 17.4% to £21,769, though it is a sector with high numbers of part-time workers.
RetailCURe is run “by the retail industry for the retail industry”, and other high street names backing it include Iceland, New Look and Pets at Home, with more names likely to come on board, according to a spokesman.
All members will have access to loans from £500 up to £5,000 at interest rates ranging from 9.9% APR-26.8% APR, while two-thirds of the loans that have already been issued – the union has been live and trading for some weeks – are less than 10% APR. By contrast, many payday lenders charge more than 1,000% APR.
The new credit union is also offering “market-beating” rates up to 3% on its savings accounts.
To join retailCURe, an individual must open an easy access account with a £1 minimum deposit and continue to save regularly. They are then eligible to apply for a loan or another savings account. Some employers will be allowing their staff to pay directly into the credit union from their wage packet.