Credit Unions, the new banks?
Landlords, in common with the majority of the population, are viewing the coming budget with trepidation. Apart from the feared cuts and tax hikes that will affect all the population, the residential landlord is steeling himself for the announcement of a massive rise in Capital Gains Tax. What better time then, for the average landlord to appraise his financial situation and spend some time looking at different areas where he can ease his financial situation.
First of all he can look at the obvious opportunities to save cash, looking around for cheap landlord insurance for example, but how many of us look at our bank charges, wince at the amount being taken from us and then go on and do nothing about it.
It is a fact that many bank account holders are paying outlandish charges for no more reason than they can’t be bothered to look around and change their bank or even stay at the bank but change the type of account, and the banks know this.
How many of us go overdrawn accidentally? Millions! Most people have done it and rectified the situation almost immediately, but almost immediately is too late. Some banks can charge over £30 for just one entry into the red type. More and more of the banks are now charging higher fees for going into the red but there is an alternative to banks and these financial institutions often place charges on overdrawn current accounts at a fraction of the levels of the High Street Banks. They are called Credit Unions.
Credit Unions are basically financial co-operative movements and as such are owned and governed by their membership. Each credit union has a definable common link which “bonds” the membership. This usually means the unions operate in geographically small areas and the “bond” can often be something akin to a trade union, religious community or some other local association. Originally the unions only offered basic services, mainly savings and loans, but many now offer current accounts and other products in the vein of ISA’s and Child Trusts.
Some credit unions such as the London Mutual credit union provide current accounts that offer more or less the same facilities as the banks such as direct debits and standing orders yet only levy a charge of 95p a week, yes under a penny. Landlords can find a credit union near them by simply conducting a search online or by contacting the Association of British Credit Unions Limited.