Southwark Credit Union and Blackfriars Advice Centre are joining forces to help Southwark residents deal with their Christmas debts.
The Barclays Financial Inclusion Fund has enabled Southwark Credit Union to develop a Money Advice Partnership with Blackfriars Advice Centre that will provide long-term financial support to Southwark residents through joining together access to money advice, affordable credit and a planned approach to budgeting and saving.
Through the partnership with Blackfriars Advice Centre, Southwark Credit Union is actively encouraging people to take control of their spiraling debts. The easy availability of credit and the financial pressures caused by Christmas mean that personal debt in Britain now amounts to £1.13 trillion, with the average household debt standing at £7,650, excluding mortgage.
Lakshman Chandrasekera, CEO of Southwark Credit Union said: "Many people are now facing up to the cost of Christmas and wishing they had done things differently. As a responsible lender, Southwark Credit Union is encouraging people to deal with their debt problems – whether it is £5,000 on a credit card or £500 to a loan shark. It's not the size of the debt that is important, but whether you can afford to repay it."
For people on a low income, debt problems can be exacerbated by the high amount of interest charged on loans from extortionate lenders. A £500 loan repaid over 55 weeks to a doorstep lender charging 177% APR can typically add an extra £325 in interest repayments to the cost of the debt.
Jenna Eastlake, Senior Financial Inclusion Manager at Barclays says,
"Credit unions have a critical role to play in fighting against loan sharks by providing affordable finance and debt advice to those who really need it. I am delighted that this year we have been able to support Southwark Credit Union to establish a money advice partnership that will benefit their community."
Southwark Credit Union is a £4.5 million financial co-operative providing affordable financial services to people living or working in the London Borough of Southwark or the SE1 postal code area. Further information is available from 020 7787 0770.
In December 2005 Southwark Credit Union's 5,754 members had savings of £3.8m and accessed £3.7m in affordable loans.
• MP joins credit union – 22 August 2005