Credit Unions: Membership

The government is a strong supporter of the mutual sector, including credit unions, and is working to support its growth in line with the manifesto commitment to double the size of the co-operative and mutual sector.

On 18 March, the government announced plans to reform the credit union common bond by:

• Increasing the potential membership cap on the locality bond from 3 million to 10 million, which will significantly expand the potential size of locality-based credit unions, which make up 79% of the sector, and reduce uncertainty around merger activity.
• Allowing credit unions to admit students to locality-based credit unions, if not otherwise eligible through residence or work.
• Expanding eligibility for members' relatives to allow credit unions to admit relatives of qualifying members regardless of whether they share a household.
• Allowing credit unions to retain retired members as fully qualifying members.

The reforms will apply across Great Britain, including in Milton Keynes and Buckinghamshire. Full details of the government’s plans have been published in a call for evidence response available on GOV.UK.

The government will legislate to give effect to these reforms as soon as parliamentary time allows. A full impact assessment will be published alongside the legislative reforms.

The reforms to the credit union common bond form part of a broader package of measures to support improved access to financial products and services under the Financial Inclusion Strategy. The Strategy itself will be reviewed two years after publication to assess its overall progress.