GMB Credit Union knows that money is very important to our members. We also realise that during uncertain times, concerns about money can cause feelings of exclusion, anxiety and fear.
15% of UK adults who are of working age don’t have any savings, and 34% have less than £1,000 saved up.
Asking members with little or no savings to save while they take out a loan from GMBCU might sound odd, but it really works well.
Here’s what happens:
- Members find it helpful to have their savings locked away
- They start to believe they can actually save money
- By the end of their loan, they have a little pot of savings
- Then, they often choose to keep saving on their own
The ‘save as you borrow’ method has other perks too. Members might pay off their loan early or use their savings for future loans. These future loans could have lower interest rates thanks to their good saving habits.
Member savings will also be eligible for an annual dividend paid in April. Savings are automatically covered with a free life insurance up to a maximum of £2,500 if a member passes away.
This approach helps not just individual members but the whole GMB community. More savings in the Credit Union means more members can get loans.
Locked savings – save as you borrow in action
GMB members with a loan are asked to save a small amount each month or week on top of their loan payment.
These savings are locked and count towards their loan. Members can take out these savings when their loan is smaller than the savings or fully paid off.
This way, members end up with their own savings and hopefully start a habit of saving regularly.