Flamesavers Credit Union

Flamesavers Credit Union is a member-owned savings and loan co-operative, set up for people who work, or have worked, in the fire service and for their families. It has over 1,300 members¹. Members save regularly, and those savings are pooled to fund loans to other members¹. It is a small, mutual alternative to a high street bank: you are a co-owning member rather than a customer¹.

The main things it offers are a savings account, loans of up to five times your savings balance to a maximum of £20,000, and free life insurance on every loan². It pays a dividend on savings rather than interest, and it does not charge fees or transaction charges⁴.

Because it is a credit union, the rules are different from a bank's in ways that matter. You must be a member to borrow². Your savings are protected by the Financial Services Compensation Scheme up to £120,000 per person⁵. And if you fall behind on a loan, the credit union may be able to use your savings to repay it⁶.

What Flamesavers Credit Union offers members

Flamesavers is a credit union, which means it is owned by the people who save and borrow with it rather than by shareholders. Members' savings are pooled to provide the resources for lending to other members¹. Any profit the credit union makes is paid back as a dividend on a member's savings¹.

Its product range is deliberately narrow. There is a savings account, which is where membership starts, and there are loans. Every loan includes free life insurance, with the premiums paid by the credit union and the loan written off if the member dies². There are no fees or transaction charges on loans².

That is a much smaller range than most banks offer. Credit unions generally can offer junior savings accounts, Christmas savings accounts, prepaid debit cards, insurance products, cash ISAs and in some cases mortgages, but that is a description of the sector rather than of Flamesavers⁸. If you want a current account, a cash ISA or a mortgage, the current accounts, ISAs and mortgages guides set out how those work elsewhere.

The credit union's own site is the place to check what is available today, including any product it has added or withdrawn since. What follows covers how each part of the offer works, so you can judge whether it fits your circumstances.

Saving with Flamesavers: payroll deductions and instant access

Saving is the entry point to membership. Flamesavers members can save at an affordable level, whether that is £10 or £100¹. The usual route is payroll deduction, which takes the money straight from your wages before you see it¹. That is how most workplace credit unions work, and it is why they suit people who find saving from a current account hard to keep up.

Savings are instant access, so you are not locking money away for a fixed term¹. You can also pay in by standing order or BACS. If you pay by BACS, use your membership number and surname as the reference so the payment reaches the right account⁴.

There is a cap on how much you can put in as a lump sum: no more than one lump sum deposit each financial year, with the amount set by the credit union¹. Flamesavers' financial year runs from 1 October to 30 September⁴. Regular saving is not capped in the same way, and the credit union publishes a table showing what different monthly amounts build up to over a year, from £120 at £10 a month up to £600 at £50 a month¹.

Savings are covered by the Financial Services Compensation Scheme, and the credit union's own terms describe the account as instant access¹. Credit unions more widely offer a range of savings accounts including instant access accounts and ISAs, so if you want a tax-free wrapper it is worth asking what is available⁹.

Dividends instead of interest

Flamesavers does not pay interest on savings. Instead it pays a dividend, based on the previous year's financial success⁴. That is a real difference from a bank account, and it changes what you can expect.

A bank or building society tells you the rate when you open the account, and pays it whatever happens. A dividend is not fixed in advance. It is calculated once the accounts have been audited and approved at the Annual General Meeting, and paid after the AGM, usually in the latter part of each year⁴. The amount depends on how much the credit union has made and how much you have saved¹⁰.

Flamesavers has published what it paid in recent years: dividends of 3%, 2.5% and 1.5% over the last three years¹. Those are past figures, not a promise of what will be paid next, and the credit union does not guarantee a dividend at all in a year when it makes no surplus.

Credit unions generally pay a dividend once a year rather than monthly interest¹⁰. If you are comparing this with a savings account, the honest comparison is between a variable, uncertain annual payment and a stated rate, not between two rates.

Flamesavers loans: borrowing against your savings

Loans are where the credit union's structure shows most clearly. A member may borrow up to five times their savings balance, up to a maximum loan of £20,000².

Two conditions shape what that means in practice. First, only members are eligible to receive loans from the credit union². Second, during the course of the loan one fifth of the loan balance must be kept in your savings². So if you borrow £5,000, £1,000 of your own savings stays in the account as security until the loan is repaid⁴. That money is still yours, but you cannot withdraw it while the loan runs.

The credit union's own policy describes the arrangement as an amount of your savings equivalent to a fifth of the loan balance being held as security until the loan is repaid⁴. The maximum term is five years⁶.

For context, credit unions in general usually let you borrow two or three times what you have in savings, depending on their loan policy, so Flamesavers' five-times multiple is at the more generous end of the sector¹¹. The trade-off is the savings requirement: you need a savings record before you can borrow much, and some credit unions ask you to build up savings first¹².

How loan interest is charged and repaid early

Interest on Flamesavers loans is charged monthly on a reducing balance¹. In practice that means interest is calculated on a reducing loan balance on the last day of a month and added on the first working day of the next month⁶. Because the balance falls as you repay, the interest charged each month falls with it, rather than being worked out on the original amount for the whole term.

The credit union states that it only charges interest on the outstanding balance at the end of each month⁴. There are no penalties for repaying your loan earlier than agreed, or for making lump sum repayments². The loan policy says the same: there are no penalties associated with repaying your loan quicker than agreed⁶.

Short-term borrowing is treated differently. All Flamesavers loans can be short term, and for those the credit union asks for one month's interest only, after which the loan can be repaid in full or part with no penalty charges⁶. That structure suits a member who needs to bridge a few weeks rather than spread a cost over years.

The board reserves the right to change the loan policy at any time, but members will be informed of any changes, and changes will not affect existing loans⁶. So the terms you sign up to stay with that loan.

Free life insurance on every loan

Every Flamesavers loan includes free life insurance. The premiums are paid by the credit union, and the loan is written off on a member's death². The credit union's own summary puts it plainly: if you die your loan is written off and your nominated recipient receives any savings you may have¹.

This is a common feature of credit union lending rather than something unique to Flamesavers. When you borrow from a credit union you normally get free life insurance to cover the value of the loan, so the loan is repaid if you die before paying it back in full, and most also offer free life or loan-protection insurance¹³.

It is worth being clear about what this is and is not. It covers the loan, not your wider circumstances. It is not income protection, and it does not pay out a lump sum to your family beyond clearing the debt and releasing your savings to your nominated recipient¹. If you want cover for your income or for a mortgage, that is a different product, and the protection insurance guide explains how those work.

Flamesavers does not underwrite this cover itself; it is provided as part of the loan arrangement, and the credit union pays the premiums². If you want the detail of what is covered and who provides it, ask the credit union for the policy terms.

Who can join and how to open an account

Membership is built around a common bond. Credit unions work by all members sharing a common bond, such as living, working, studying or volunteering in a certain area, working in the same industry or for certain employers, or belonging to the same trade union¹⁴. Flamesavers' bond is the fire service, and it was previously known as Staffordshire Fire & Rescue Service Credit Union¹⁵.

Once you are a member, you can remain a member for the rest of your life⁴. That answers the question most people ask first. If you leave the fire service or retire, you do not lose the account. If you receive a pension, you complete a Pension Deduction Form so deductions continue from it; if you have no pension, you can set up a standing order instead⁴. A change to your deduction takes effect from the next available payroll or pension run date, which may be after your next deduction date⁴.

Opening an account starts with registering online. Once registered, you wait until the registration is approved by Flamesavers, which may be the next day if you register after 3pm, and a PIN is then sent to you by text message⁴. From there you can set up regular saving by payroll deduction, standing order or BACS¹.

If you are not sure whether you qualify, the credit union's office can confirm it. The credit unions guide covers how the common bond works across the sector, and the savings guide covers how savings accounts compare more generally.

Managing your account online, by text and through the office

Day-to-day management is split between the website, text messages and the office. Online account access is made available for approximately 24 hours a day⁴. The office is open Monday to Friday, 9.00 a.m. to 3.00 p.m.⁴. That is a short window compared with a bank's call centre, so it is worth planning around.

Withdrawals can be requested by email, text or by ringing the office, once you have completed a Bank Transfer of Authority Form and it has been received¹. For a text withdrawal, start your message with FLAMES followed by your membership number, surname and the amount you would like to withdraw, then send it to 66777¹. The money goes to your nominated bank account.

Loan applications are made on a loan application form and completed online². Once the loan has been agreed, the money is transferred into members' bank accounts⁶.

If you forget your password, entering it wrongly several times will lock your account, and you will then need to email or call to unlock it⁴. Keep your mobile number and email address current with the office, because the PIN is sent by text and a lockout is cleared through those channels⁴.

If you fall behind on loan repayments

The first thing to know is that a credit union can usually reach your savings. If you miss payments on a loan, the credit union may be able to use your savings to repay the loan⁶. That is a structural feature of credit union lending, not a penalty imposed for missing a payment, and it is why the savings requirement exists.

Flamesavers' own position is that, depending on circumstances, the loan can be renegotiated if possible⁶. Its published approach to hardship is to do all it can to help, for example by reducing payments or suspending payments or interest for a few months¹. That is a conversation to start early, before arrears build up, and during office hours.

If you are struggling more widely, there is free help. StepChange Debt Charity and National Debtline both advise on credit union loans and on what happens when savings are used to cover arrears⁶. A debt management plan or a debt relief order may be options, and the debt guide sets out how those work and what they do to your credit record.

It is worth understanding the difference between this kind of borrowing and the alternatives. A payday lender must check your credit worthiness before giving you a loan, rolling one over or increasing your credit¹⁷. A secured consolidation loan is secured against your home, and if you fall behind the lender could repossess your home and sell it¹⁸. Flamesavers loans are unsecured and capped at five times your savings, which limits how far you can get into difficulty, but it does not remove the risk.

Protecting your savings: FSCS cover

Money held with a credit union is protected by the Financial Services Compensation Scheme. The FSCS can pay back any money you hold with a failed credit union, up to its compensation limit of £120,000 per person⁵. Joint account holders are each protected separately, up to £120,000 in total across all accounts held with the credit union⁵.

If the credit union failed, you would not need to make a claim. The FSCS returns your money automatically, up to its compensation limit¹⁹. That is different from some other kinds of claim, where you have to apply.

One point to check on older documents. Flamesavers' own how-it-works page states that savings are covered by FSCS up to £75,000¹. The FSCS's own current guidance gives the limit as £120,000 per person for credit union deposits⁵. The two figures disagree, and the FSCS figure is the current official one.

The protection covers deposits. It does not extend to every product a financial firm might sell: credit insurance, for example, is not eligible for FSCS protection²⁰. FSCS protection does extend to mortgage advice and to financial advice in defined circumstances, which matters if you are ever advised to move money²¹.

Flamesavers Credit Union Limited is authorised by the Financial Conduct Authority, firm reference number 213566, with a status effective date of 02/07/2002, and it appears on the Bank of England's list of UK-incorporated credit unions⁷. You can check the register yourself before opening an account.

Contacting Flamesavers and complaining

The office is the main route for anything that needs a person: Monday to Friday, 9.00 a.m. to 3.00 p.m.⁴. Withdrawals, payroll changes, password lockouts and loan queries all go through it, by phone or email¹.

If something goes wrong and you are not satisfied with the response, a credit union is covered by the same complaints system as other financial firms. The Financial Ombudsman Service can look at complaints about credit unions if the firm has not resolved them. The consumer protection guide explains how the ombudsman works, what it can award and how long you have to complain.

Before that stage, it is worth putting the complaint in writing and keeping a copy, and giving the credit union a clear chance to put it right. Free, impartial help is available if you are unsure how to frame a complaint: MoneyHelper offers guidance on credit unions and on financial complaints, and the Consumer Council offers help to consumers in Northern Ireland¹⁴.