Credit Union borrowing hit record levels in 2022

2nd May 2023

New data from the Bank of England has found that the total Credit Union borrowing hit a record £2 billion in 2022 with all-time high membership of unions at nearly 2 million.

The data showed Credit Union membership rose by 60,863 to reach 1,980,964 at the end of 2022 as more borrowers widened their net in the search for affordable credit solutions.

Analysis of the data by Freedom Finance has found that Credit Unions saw huge growth through 2022 as consumers tackled the cost of living squeeze. Total loans exceeded £2.0 billion for the first time by the end of the year, an annual increase of £261 million or 15%, over the course of 2022.

The Freedom Finance Credit Monitor revealed that average household quoted rates on credit cards rose to their highest levels since 1998 last year reaching 22.48% at the end of December. Personal loan rates also saw their highest quarterly increase of all time in Q4 2022 although rate increases among both products have since stabilised and nudged down. 

Emma Steeley, CEO at Freedom Finance said “Credit Unions are a financial lifeboat for many borrowers and they play a vitally important role within the consumer credit sector.”

“We will always support institutions that aim to increase and diversify the range of products available on the market, particularly those that are targeted at borrowers who may otherwise struggle to access affordable credit.”

“As the cost of borrowing has experienced such a surge over the past year it is little surprise that Credit Unions have experienced a boom in interest. This is particularly elevated given the withdrawal of many short-term credit providers from the industry leaving consumers who may have thin credit files, for example, feeling excluded from the market.”

“We know the dangers that consumer credit exclusion poses to society through our work on loan sharks with the CSJ which suggested over a million people could be victims of illegal lending.”