ABCUL has launched its social media campaign Work Not Worry, to raise awareness of the benefits of partnerships with credit unions among employers and to encourage more employers to establish new relationships with their local credit union. Credit unions offer savings and affordable credit facilities with payments deducted from pay.
Evidence suggests that financial stress costs the UK economy £121bn (Neyber 2016) and 30% of employees are making uninformed financial decisions about saving and spending (CIPD, 2017). 26% of working-age adults in the UK has no savings and 1 in 4 workers have lost sleep over money worries (CIPD, 2017).
For over 30 years, employers have used the services of credit unions in their workplace. These include household brands and institutions such as Admiral Insurance, Royal Mail, British Airways and the NHS. Research funding by Citi Foundation states that 70% of employees who take advantage of credit union partnerships feel more financially capable and better supported and 83% of employer partnerships demonstrate Corporate Social Responsibility to staff by providing a material benefit at little or no cost to them.
A majority of employers say working with credit unions improves the financial capability of staff and thus helps create a more productive and better-supported workforce. This is supported by the Money Advice Service research on employer best practices on financial challenges and their impact in the workplace which states that 59% of employees with current financial worries say money concerns prevent them from performing their best at work.
A key problem in workers’ lack of financial resilience and reliance upon debt is the chronic lack of savings across the income range. However, credit unions’ Save As You Borrow method – which asks people to save a small amount while repaying their loan – has great benefits in creating savings habits. Research by the Fairbanking Foundation found that while only 26% of credit union borrowers saved regularly before joining their credit union, 71% intend on saving regularly after repaying their loan.