Labour MPs urge Reeves to expand credit unions for low‑income households

A group of Labour MPs has called on chancellor Rachel Reeves to back a major expansion of credit unions to improve access to cheap credit for millions of people on low incomes. The appeal, made in a letter to Reeves seen by the Guardian, coincides with the 10‑year anniversary of the UK’s military credit unions, which are supported by Queen Camilla and described as “an ethical and affordable alternative to high‑cost lenders” for service personnel.

The MPs, including several parliamentary committee chairs, asked that the financial inclusion bill be enhanced by placing a duty on every housing association to promote credit union membership and that credit unions be given access to the government’s Help to Save product, which currently is only offered by mainstream lenders.

They said: “Since 2010, many opportunities to help credit unions expand in the UK to offer more affordable credit and better savings rates to far more people have been missed…a renewed cross‑government focus on the future expansion of credit unions is overdue.” Bank of England data cited in the letter shows membership rose 9% between 2020 and 2025 to more than 1.5m, with outstanding loans of almost £5bn, almost half of which are in Northern Ireland; the total is said to be less than 1/20th of an estimated £120bn of outstanding non‑mortgage household debt.

Key Topics

Politics, Credit Unions, Rachel Reeves, Financial Inclusion Bill, Housing Associations