Before I ever had the chance to spend, I was already saving with a credit union.
That was during my time working in the NHS. Like many others, I joined the NHS Credit Union through a payroll deduction scheme. It was a simple, practical way to put money aside before it hit my bank account and to this day I still use that credit union. My own experience has made me believe wholeheartedly in the power and potential of the credit union model.
That’s why I recently led a Westminster Hall debate this month on the role and future of credit unions. Because while these community-based financial co-operatives have already changed lives, they could be doing so much more if we broke down the bureaucracy holding them back and supported them properly.
In communities across Scotland and the UK, credit unions are quietly delivering services where the high street banks have packed up and left. In my own constituency, credit unions now operate out of the buildings that commercial banks vacated when they moved out. These aren’t just lenders. They’re trusted, people-powered institutions built on values like co-operation, inclusion, and community resilience. Even more importantly, they know the people they are lending to and the money they lend is spent locally.
But they’re under pressure.
Credit unions are regulated by both the Financial Conduct Authority and the Prudential Regulation Authority. For organisations that might only have a handful of staff and rely heavily on volunteers, that kind of dual oversight can be overwhelming. Of course regulation is important, but it needs to match the scale and risk of the organisation. It shouldn’t stifle the very institutions that are trying to serve people fairly.
One issue I raised during the debate was the role of the Financial Ombudsman Service. In some cases, it’s been applying consumer credit rules to credit unions that don’t legally apply. That might sound technical, but for a small credit union it can create a whole world of stress, confusion, and extra cost. These are things that could genuinely threaten their survival. It’s something that urgently needs to be clarified.
Credit unions aren’t asking for special treatment. They just want clarity, fairness, and the chance to grow.
We already know what success looks like. The NHS Credit Union, for example, has grown from a small workplace scheme into a thriving institution with over 24,000 members across Scotland and northern England. That kind of growth has come from practical policies like payroll savings schemes and widening access to membership beyond just one employer, straightforward ideas that could easily be scaled up across other sectors and communities.
There are brilliant local examples in local high streets across the UK, championed by my parliamentary colleagues. In Wolverhampton, their credit union runs a school uniform savings scheme, helping parents budget for an annual expense that often causes stress. In Stirling, there’s a call to allow public bodies to bank with credit unions, keeping public money circulating in local economies.
So what should we do next?
First, the Government needs to make sure its upcoming Credit Union Strategy reflects how important it is to get regulation right, and that we remove any ambiguity around the ombudsman’s role. Second, we should look at the rules around who can join a credit union. Right now, these rules are too restrictive, and that’s stopping credit unions from growing. Third, let’s invest in the systems, staffing and technology that credit unions need to modernise and meet new demand. And finally, education, we need to raise awareness of the many benefits of being part of a credit union. Far too many people still don’t know what a credit union is, let alone how to join one.
All of this feels more important than ever. As part of wider efforts to tackle the cost of living crisis, the government is now looking at how to better support and empower credit unions. They remain one of the few ethical alternatives that genuinely work – offering fair loans, savings schemes, financial education, and real support, all while staying rooted in the communities they serve.
Every pound saved in a credit union stays in the local economy. That’s not just good finance, it’s good politics.
These institutions deserve more than warm words. They need political backing, proper investment, and a plan for growth.
I was proud to speak up for them in Parliament last week, and I’ll keep doing it. Because credit unions don’t just help people avoid poverty they help build financial confidence and stronger communities.
Now that’s something worth fighting for.
Credit unions could be doing much more if we cut the red tape holding them back and supported them properly
