Credit unions are not-for-profit financial organisations set up by people with something in common, to benefit their members. That common factor may be living in the same town, working in the same industry or belonging to the same organisation.
They’re there to provide a financial community, where its members mutually benefit - as there’s no profit for third party shareholders. The primary functions are savings and borrowing, but more and more services are now being offered by credit unions. They are for everyone, but can particularly help those who can’t get access to ordinary bank products or who are struggling with their finances.
National Firesavers is a credit union for firefighters, retired firefighters, fire and rescue service staff and staff working for Firefigthers Charity, Welfare Fund and Fire Brigades Union.
The National Fire Savers Credit Union was first established in 1998 as a credit union for London Fire Brigade staff (the London Fire Savers Credit Union). After twelve very successful years, the London firesavers agreed that all firefighters and fire and rescue service staff, wherever they are serving, should be able to benefit from the Credit Union. So, in 2010, the common bond was extended to cover the whole of England, Scotland & Wales and the National Fire Savers Credit Union was created.
How does it work?
Credit unions aim to help you take control of your money by encouraging you to save what you can, and borrow only what you can afford to repay. In essence, we are a savings and loans co-operative, which just means the members pool their savings to lend to one another and help to run the credit union.
This is done in a ‘not-for-profit’ way, so the money is only used to run the services and reward the members; it isn’t used to pay outside shareholders, like most other financial institutions.
Throughout the year, the credit unions must put aside enough money to ensure it's financially secure. Any money that’s left over is given back to those who have a savings account as a ‘dividend’, or it’s used to improve the overall service to members.
To keep all the money safe, credit unions can’t lend out all their members’ savings or invest the remainder into anything that carries much risk. Plus, all deposits in credit unions are covered by the Financial Services Compensation Scheme so have the same government protection as bank and building society savings accounts.