Advance Credit Union

Advance Credit Union is a Birmingham credit union that offers savings and loans under one membership. It serves more than 6,000 members and is open to anyone aged 18 or over who lives or works in a Birmingham B postcode¹. Joining is free, a minimum deposit of £5 activates an account, and £5.00 must stay in it to keep the account open³.

Credit unions are member-owned and not run for profit. Instead of paying interest on savings, a credit union shares its profit evenly among savings accounts as a dividend, with some reinvested to improve services⁴. Advance Credit Union describes its savings as easy-access accounts and its loans as fair and flexible, with eligibility based on your ability to repay rather than a credit score alone¹.

This page covers what the credit union offers across savings, the PrizeSaver draw and loans, how to join and bank with it, what happens if a repayment is missed, and how your money is protected.

What Advance Credit Union offers: savings and loans under one membership

Advance Credit Union describes its offer as a range of savings and loans, with borrowing available whether you are a member or not¹. That is unusual: most credit unions require membership before they will lend, and some will lend as soon as you become a member while others ask you to save for a set period first⁴.

All credit unions offer savings accounts and loans, and many add products such as junior savings accounts, Christmas savings accounts, prepaid debit cards, insurance products, cash ISAs and in some cases mortgages⁸. Advance Credit Union's own product range is narrower, as the table below sets out.

Membership is the thread that runs through all of it. You can hold multiple accounts, including savings and loans, all under one membership, and the credit union's own guidance notes that most credit unions allow withdrawals online or through a mobile app⁵. The sections below take each product in turn.

Who can join: living or working in a Birmingham B postcode

Every credit union has a common bond, which determines who can join: living or working in the same area, working for the same employer, or belonging to the same association such as a trade union or church⁴. Advance Credit Union's common bond is geographic. You need to be aged 18 or over and live or work in the B postcode³.

The credit union names Erdington, Sutton Coldfield, Castle Vale, Kingstanding, Ward End and Solihull among the areas it serves⁵. Joining is free for Birmingham residents living or working with a B postcode, and there is no joining cost for residents living or working in Birmingham and Solihull².

The Back to School loan is open on the same terms, to all who live or work in Birmingham's B postcode, with no employment required¹⁰. If you are outside the common bond, a credit union covering your own area is the route in; the credit unions guide explains how the common bond works across the sector.

Savings accounts: paying in, withdrawals and dividends

Advance Credit Union's savings accounts are easy-access, and the credit union describes them as helping members reach their goals¹. There is no notice period to close a savings account³.

You can pay in by Standing Order, payroll deduction, bank transfer, directly from your benefit payments, or as cash at the Erdington counter³. Withdrawals can be made on the app, by requesting a payment to a bank account in your name, through internet banking, or by completing and returning a withdrawal request form³. Withdrawals to third-party accounts are not allowed³.

Instead of interest, a dividend may be awarded at the end of each year when the credit union performs well, and it is typically paid to members before the end of April¹¹. The board of directors may recommend a dividend payment for agreement by the members at the annual general meeting³. That means the dividend is not guaranteed and is not a rate you can rely on in advance.

The maximum you can have deposited with Advance Credit Union is £18,000, subject to periodic reviews³. For comparison, NS&I Premium Bonds and Income Bonds both state that withdrawals can take 3 to 5 days to reach your bank account¹². The savings guide covers how easy-access accounts compare across providers.

PrizeSaver: how the monthly prize draw works

PrizeSaver is a savings account that enters you into a monthly prize draw. You need to be a new or existing member of Advance Credit Union to take part⁹. The scheme is operated for participating credit unions with a main prize of not less than £5,000 and at least twenty smaller prizes of not less than £20 each⁹.

The monthly draw takes place around the 15th of each month or the next working day, and Advance Credit Union says draws happen between the 15th and 20th of each month⁹. The Association of British Credit Unions Ltd provides the prize draw facility to Advance Credit Union, and the promoter of the draws is Advance Credit Union at 200 Sutton New Road, Erdington, Birmingham B23 6QU⁹.

PrizeSaver is a savings account first and a draw second: the money you pay in remains your savings, and the draw is free to enter for members with the account. The savings guide explains how prize-linked savings sit alongside ordinary accounts.

Loans: how affordability is assessed and how money is paid out

Advance Credit Union says loan eligibility is based on your ability to repay, and that terms are often more flexible than traditional lenders⁵. Credit unions are required to always consider affordability when assessing loan applications¹⁵. In practice that means the credit union looks at what is left after your bills rather than applying a single cut-off⁴.

If you are receiving Universal Credit, Child Benefit or other benefits, you may still apply¹⁶. Applicants must be over the age of 18 and meet the common bond requirements¹⁶. Loan applications may require Open Banking verification as part of the credit union's affordability and identity checks¹⁶.

Once a loan is agreed, the payout timing is set out in the table below.

Repayments are made by Direct Debit, Standing Order, Child Benefit or another method previously agreed, and interest on the loan is accrued daily¹⁷. Advance Credit Union's loans are insured up to age 69, so the loan is covered in the event of death¹⁶. The loans guide sets out how affordability checks work across the market.

Attached shares: savings that secure your loan

When you borrow from Advance Credit Union, part of what you repay goes into attached shares. The credit union describes these as savings you build as you pay back your loan, paid into by everyone with a loan as part of their repayments, acting as security⁵. Your shares in the credit union are the security for the loan¹⁷.

The practical effect is that you cannot withdraw your attached shares for the duration of the loan, or until your shares exceed the amount of the loan outstanding¹⁷. This is a common credit union model: Willowfield Credit Union, for example, states that all loans are secured by the amount you have in shares¹⁸.

Two consequences follow. First, you are building savings at the same time as repaying debt, which is the point of the model. Second, the money is not available to you while the loan runs, so it should not be counted as an emergency fund. The credit union will not accept repayment instalments larger than the repayments set out in the agreement¹⁷.

Missed repayments: what happens and when it is reported

Advance Credit Union's loan terms allow it to disclose information to any credit reference agency, credit union, debt collection agencies and to the secretary of state for work and pensions after not less than thirteen weeks of missed payments with no other arrangement made¹⁷. Before that point, a default notice gives you 7 days from the date of the notice to remedy the breach¹⁷.

What happens on your credit file follows the wider pattern. One or two missed payments usually bring reminders, and if you catch up quickly no further action should be taken and the missed payments may not be recorded on your credit file, though interest and charges including late payment charges will be added¹⁹. Missed payments are recorded on your credit file, and a creditor will soon consider a default notice for credit card or buy now pay later debts¹⁹. Credit reference agencies record a default after you have missed between three and six months' payments²⁰. Late payments, missed payments and defaults stay on your credit history for six years²¹.

Banking with Advance Credit Union: app, online and the Erdington branch

Advance Credit Union's mobile app gives instant access to your savings and lets you manage your accounts and apply for a loan, and it is free to download¹. Withdrawals can be requested through the app, by internet banking, or by completing and returning a withdrawal request form³.

The branch is at 200 Sutton New Road, Erdington, Birmingham B23 6QU, and it is also the address for the prize draw promoter⁹. Cash can be deposited at the Erdington counter³. The credit union's own guidance notes that most credit unions allow withdrawals online or via mobile app, so the app is the main day-to-day channel⁵.

For comparison, credit union current accounts generally offer paying in or taking out cash at the credit union, having money paid in such as wages, benefits and pensions, online, mobile or telephone banking, and budgeting advice and support, all free²³. Advance Credit Union's own account is a savings and loans membership rather than a full current account, so if you need a debit card and direct debits, the current accounts guide covers what is available.

How to join and open an account

Applications can be made online at advancecu.org.uk or by completing a paper application form, with an automated ID check and proof of identity and current address required³. Proof can be a valid passport, a valid driving licence (full or provisional) or an identity card issued by the Electoral Office for Northern Ireland, or two documents from the last 3 months, with benefits letters or council tax letters as first proof and a utility bill as second proof¹¹.

A minimum deposit of £5 is required to activate your account, and a minimum of £5.00 is required to keep it open³. There is no membership fee for members joining, though the terms allow a fee to be levied from time to time under the rule book³.

To join:

1. Check you live or work in a B postcode and are aged 18 or over³.
2. Apply online or complete a paper application form³.
3. Provide proof of identity and current address¹¹.
4. Pay in the £5 minimum deposit to activate the account³.

If you want to add the PrizeSaver account, you need to be a new or existing member⁹. The getting started guide covers the documents most providers ask for.

Complaints and FSCS protection for your savings

If something goes wrong, you can speak directly with one of the staff or volunteers at the Erdington branch²⁴. A complaints procedure is available to download, or a paper copy can be provided on request²⁴. If you feel your complaint remains unresolved after following that procedure, you may escalate the issue to the Financial Ombudsman Service²⁴.

Savings with Advance Credit Union are protected by the Financial Services Compensation Scheme³. The scheme protects each eligible depositor up to £120,000 in total across all accounts held with the credit union, and where there is a joint account each holder is protected separately up to that limit⁶. The credit union's own terms state the same £120,000 limit for an eligible depositor, combined across all accounts with the credit union³.

If you hold savings in more than one account with Advance Credit Union, they count together towards the same limit³.

Advance Credit Union is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, with firm reference number 213228³. It appears on the Bank of England's list of UK-incorporated credit unions²⁵. The FCA Register lists two previous names, North Birmingham Community Credit Union Limited and Erdington & District Credit Union Limited, and records the firm as authorised since 2 July 2002⁷.