Regulation of the buy now pay later industry is long overdue says Chris Canham, CEO of Hoot Credit Union based in Bolton and Bury.
More than 1 in 10 consumers plan to put Christmas on credit using BNPL apps.
Millions of people use Buy Now, Pay Later firms, such as Klarna and Clearpay, when shopping online or in store. Managed correctly, they can be a cheap and quick way of accessing credit. But research shows many users aren’t aware that if something goes wrong, you face late fees, and, increasingly, marks on your credit file.
Hoot members tell us that they are increasingly being caught in the trap of signing up to BNPL deals to fund Christmas, and then face multiple and unaffordable repayments in January. Online shopping just five or six times for Christmas gifts can accumulate a hefty repayment commitment without realising the consequence of having to repay, or understanding that Buy Now Pay Later is a debt that will appear on a credit report. And debt charities have argued that BNPL companies encourages people to buy things they can’t afford.
The Financial Conduct Authority plans to bring this up until now unregulated practice under regulatory rules including compulsory affordability checks and offering clear and accessible information, including making it clear that BNPL is a debt.
Using a credit union save and borrow scheme to spread the cost of Christmas is a good way to pay for the cost this year, and save for next. A report by the Fairbanking Foundation says that getting into a good savings habit, particularly by those most financially vulnerable is the best course of action to cover those big-ticket items.
“Save as you borrow” (SAYB) is the practice of credit unions to encourage their members to put an amount into a savings account as part of making a loan repayment, meaning that when the loan is repaid, there is a savings pot to call upon to help the cost of next Christmas. At Hoot 84% of new borrowers are saving for the first time.
To find out more about how credit unions can help people spread the cost in an affordable and accessible way go to www.wisewithmoney.org.uk
The Mayor of Bolton showed his support for Hoot Credit Union, winner of the Social Enterprise of the Year at the Bolton Business Awards, by signing up as its latest member.
Joined by the Lady Mayoress Karen Houldsworth, Cllr Morgan signed up as one of 6,000 Hoot members and confirmed his commitment to Hoot’s mission of improving the financial well-being of the community.
Cllr Morgan met with the staff and volunteer directors of the credit union and learned more about how Hoot serves its community as a provider of ethical savings, loans and financial education.
Rob Andrews, Chair of the Board of Directors said “The Board ensures that the credit union is at its best. We believe the CEO and her team do an excellent job to ensure the integrity of the service we provide, and the inclusion of the whole community in benefitting from membership of the credit union”
Chris Canham. CEO added “Social enterprises play a vital role in our local economy and Hoot is proud to be the focus of community finance in Bolton. Thousands of people who live and work in Bolton benefit from our services, and are able to support the most financially challenged in our community by saving and borrowing from their member-owned, community focused social enterprise.”
The Mayor and directors also discussed the positive impact of payroll saving schemes in partnership with employers such as Bolton Council, Bolton at Home and Carr’s Pasties, and how encouraging employers to set up saving with Hoot via payroll is an essential ingredient in their support for employee wellness. Those employees are Bolton residents and by offering value for money services and supporting their well-being, we are fulfilling one of the most important elements of community credit unions
In giving the award, Bolton News said that Hoot won because of the impact it makes on the financial well-being of the community, and the success it has demonstrated in maintaining a community-owned business in a competitive market.
Chris Canham, CEO says “We are delighted to have won this award. We are a small team dedicated to improving financial well-being, and providing affordable loans and savings to everyone. The award has boosted the enthusiasm of our employees to do even more to help the most financially challenged, and also to get the message out that everyone can benefit from our services”
Bus passengers could save up to £240 with a new value product
Option to spread payment over a year at no extra cost through the Credit Union when all buses come under local control in four months
An innovative scheme would provide certainty about fares and help keep travel affordable, supporting people through cost-of-living challenges and giving better access to jobs, skills and opportunities
Other fares are being cut and new ‘hopper’ tickets are to launch when all buses come under local control
The announcement comes as the latest GM residents’ survey shows more than half of respondents’ mental health is negatively impacted by cost-of-living pressure.
With four months to go until all buses in Greater Manchester come under local control, the Mayor of Greater Manchester confirmed today, Thursday, 5th September, plans for a new annual bus pass that will cut the cost of travel.
Available from 5th January – subject to agreement by the Greater Manchester Combined Authority – and costing £800, the Bee Bus Annual pass will be up to £240 (23%) cheaper over a year compared with 28-day tickets.
Recognising inequalities and high levels of deprivation across Greater Manchester (according to national figures, around 1 in 4 (over 700,000) residents live in areas defined as within the 10% most deprived in England), customers will be able to spread payment, at no extra cost, throughout the year with a Credit Union loan – paying £66.67 per month or £15.36 per week compared with £80 or £20 for 28 or seven-day passes respectively.
TfGM is working with all Greater Manchester Credit Unions to open applications from 5th December so that passes are ready to use from 5th January. TfGM is also working with credit unions to offer customers the chance to spread the cost of existing Metrolink products or an annual bus and tram pass starting in March 2025.
Ciara Davies, Executive Lead for the Greater Manchester Consortium of Credit Unions, said:“The Greater Manchester Consortium of Credit Unions is delighted to be involved in this innovative new partnership with Transport for Greater Manchester. Credit Unions are not-for-profit financial co-operatives that have been providing access to affordable financial services in communities and workplaces in GM for over 30 years. This new product will spread the cost of travel and save people money which is just one of the ways in which credit unions can help make your money go further.”
The changes to fares build on steps already taken to bring the cost of travel down, including the launch of the discounted Bee Anybus + Tram ticket in September 2023 – cutting the cost of combined journeys by up to 20%, the introduction of capped bus fares in September 2022 and the continued support for Our Pass, offering free travel to 16–18-year-olds. Metrolink fares have also been frozen since 2020.
We’re thrilled to share some exciting news here at Hoot Credit Union – we’ve just become an accredited Living Wage Employer! What does that mean? Well, it means that every single person working at Hoot is guaranteed to earn at least £12 an hour, which is more than the government’s minimum wage for over 21s, currently set at £11.44 per hour. We are so proud to Pay the Real Living Wage!
Why is this important? In the North West, where we’re based, around 13.5% of jobs pay less than the real Living Wage. That’s about 397,000 jobs where people aren’t earning enough to comfortably meet the cost of living. But at Hoot, we believe in fairness, and we’re committed to making sure that everyone who works with us earns a wage they can actually live on.
The real Living Wage isn’t just any wage – it’s calculated based on what people need to get by. It’s a voluntary rate that employers can choose to pay to ensure their staff are looked after properly. And since 2011, the Living Wage movement has helped over 460,000 people get a well-deserved pay rise, putting £3 billion extra into the pockets of those who need it most.
Proud to Pay the Real Living Wage
Chris Canham, our Chief Executive, couldn’t be prouder. She said, “Our employees are the heart of what we do at Hoot. It’s crucial that we take care of them just as they take care of our community. By paying the real Living Wage, we’re making sure they’re fairly rewarded for all their hard work.”
The Director of the Living Wage Foundation, Katherine Chapman, also shared her thoughts: “We’re delighted that Hoot Credit Union has joined the ranks of over 14,000 responsible employers across the UK who go beyond the government minimum to ensure their staff are paid enough to live on. It’s great to see Hoot leading by example and recognising that a fair day’s work deserves a fair day’s pay.”
This is a big step for us at Hoot, and we’re so proud to be part of a movement that’s making a real difference to people’s lives.
If you want to know more about the real Living Wage and the work of the Living Wage Foundation, check out their website.
Here at Hoot, we talk about the ‘credit union difference’, but what does it mean? We say we are different to regular loan companies because we are!
We are owned by our community
Hoot, like all credit unions, is owned by its savers and borrowers – our members. Members are represented by elected Board members who lead the development of the business in the interest of members. Profit is shared amongst the members, so everyone who saves benefits from our success.
We promote good savings habits
Loan companies are driven by profit. We care about helping our members access fair and affordable credit; and build savings for the future. That is why all of our members save. When someone takes a loan, a minimum saving amount builds up and acts as collateral against the loan. Account holders have been pleasantly surprised at how quickly this pot can build up.
But you can save without borrowing!
More than just a credit score
We aim to provide fair and affordable loans. This means that we look at individual circumstances when assessing a loan application. Whilst we do take a person’s credit score into account, we also look at affordability and any previous borrowing with us.
Making the most of your money as the cost-of-living crisis continues to bite is more important than ever. Credit unions are committed to financial education, offering hints, tips and tools to help people manage their finances better
If you open a Hoot account or take out a loan you will be able to manage your account online and be reassured that, as a regulated, member-focused co-operative, we have your interests at heart; and run the business for the sake of the community.
