Labour MPs Urge Chancellor Reeves to Boost Affordable Credit for Low-Income Britons Through Credit Union Expansion
In a bid to tackle financial exclusion, a group of Labour MPs has urged Chancellor Rachel Reeves to support a massive expansion of credit unions, which would provide cheap credit to millions of people on low incomes. The move coincides with the 10-year anniversary of the UK's military credit unions, which offer an ethical and affordable alternative to high-cost lenders for service personnel.
The MPs, including several parliamentary committee chairs, have called on Reeves to enhance the financial inclusion bill currently before parliament by adding a duty on housing associations to promote credit union membership to their tenants. They also want credit unions to be given access to the government's Help to Save product, which allows low-income individuals to earn a 50p bonus for every £1 they save.
Since 2010, many opportunities to help credit unions expand in the UK have been missed, according to the MPs. Given the current cost of living crisis and the need for increased investment in all communities, they argue that a renewed focus on expanding credit unions is overdue.
Despite struggling to make headway in the UK, membership of credit unions has grown by 9% between 2020 and 2025, with outstanding loans amounting to almost £5bn. However, this still represents just less than one-twentieth of the estimated £120bn of outstanding non-mortgage financial debt held by UK households.
The MPs point to the success of military credit unions in the US as a model for the three credit unions currently operating in the UK. They also cite Queen Camilla's support for credit unions, which she has described as an alternative to the payday loan industry.
To achieve their goal of doubling the size of the credit union sector, the MPs are calling on Reeves to adopt several measures, including giving employees a "right to save" through auto-enrolment schemes, promoting credit unions to social housing tenants and staff, and easing rules on credit unions lending to each other.
In a bid to tackle financial exclusion, a group of Labour MPs has urged Chancellor Rachel Reeves to support a massive expansion of credit unions, which would provide cheap credit to millions of people on low incomes. The move coincides with the 10-year anniversary of the UK's military credit unions, which offer an ethical and affordable alternative to high-cost lenders for service personnel.
The MPs, including several parliamentary committee chairs, have called on Reeves to enhance the financial inclusion bill currently before parliament by adding a duty on housing associations to promote credit union membership to their tenants. They also want credit unions to be given access to the government's Help to Save product, which allows low-income individuals to earn a 50p bonus for every £1 they save.
Since 2010, many opportunities to help credit unions expand in the UK have been missed, according to the MPs. Given the current cost of living crisis and the need for increased investment in all communities, they argue that a renewed focus on expanding credit unions is overdue.
Despite struggling to make headway in the UK, membership of credit unions has grown by 9% between 2020 and 2025, with outstanding loans amounting to almost £5bn. However, this still represents just less than one-twentieth of the estimated £120bn of outstanding non-mortgage financial debt held by UK households.
The MPs point to the success of military credit unions in the US as a model for the three credit unions currently operating in the UK. They also cite Queen Camilla's support for credit unions, which she has described as an alternative to the payday loan industry.
To achieve their goal of doubling the size of the credit union sector, the MPs are calling on Reeves to adopt several measures, including giving employees a "right to save" through auto-enrolment schemes, promoting credit unions to social housing tenants and staff, and easing rules on credit unions lending to each other.
I think this is a fab idea! The cost of living crisis is really hitting people hard, and affordable credit options are super important for low-income families. Credit unions have always been a great way to go - they're community-based, fair, and non-profit. We need more of these kind of initiatives to help people get back on their feet.
We just need to keep pushing for more support for these kinds of organizations - every little bit counts! 
cant wait to see the impact this could have on people's lives 
. I mean, they're already doing a great job in certain sectors, like our service personnel, so why not scale it up? It's about providing affordable options for the people who really need them most. 50p bonus on every £1 saved sounds like a no-brainer to me! 
We've been saying we want financial inclusion for years, now let's put our money where our mouth is 
. We need to support this expansion and make it easier for people to access affordable credit. It's not rocket science, just common sense 
.
! We need more options for people struggling with debt, especially low-income households who are already at the bottom of the financial ladder. Credit unions could be a game-changer here. It's not just about giving them cheap credit though, it's about empowering people to take control of their finances through things like auto-enrolment schemes and Help to Save products.
- she's all about supporting community initiatives. And I'm glad to see the growth in credit union membership, but £5bn is still a tiny fraction of what we need. We gotta scale this up and make it accessible to everyone. A "right to save" scheme sounds like a total game-changer 
. It's just not fair that low-income families are being left behind by the system. We need to do more to help them access affordable credit and build a safety net for themselves. I think expanding credit unions is a great idea - they're already doing some amazing work, especially with their military members 
. If we could get more people involved in saving and investing, it would make such a big difference. And the government should definitely help out by making it easier for credit unions to operate and promote themselves. We can't just sit back and let the cost of living crisis get worse - we need action 
.
. I just wish our politicians were more proactive on this issue instead of waiting for years like they did in 2010 
.
. The estimated £120bn of outstanding non-mortgage debt held by UK households is staggering! 
.
. Since 2010, they've been waiting for more support and now it's like "hey, let's make up for lost time" 
. The idea of auto-enrolment schemes and easing rules on lending between each other sounds super helpful 
.
. It would be a game-changer for people struggling financially 
Credit unions are definitely on the right track with their affordable and ethical lending options. But we need to do more to support them.
It's about time we got more people on board with this whole financial inclusion thing.
chancellor reeves needs to step up and support these credit unions ASAP, a 50p bonus for every £1 saved? genius 
but seriously, it's about time we gave more people access to affordable credit. credit unions are the way forward 
honestly, who needs banks when you've got credit unions? it's like the government is trying to give us a choice between the devil we know (high-interest loans) and the devil we don't know (credit unions). either way, i'm still waiting for them to address the real issue: low-income people being priced out of their own homes