London Capital Credit Union

London Capital Credit Union is a member-owned, not-for-profit co-operative based in London. It is owned by its customers, with profits returned to members rather than paid to external shareholders, and it encourages saving as an alternative to borrowing while also providing loans¹. It is one of many credit unions in the UK, which are financial co-operatives run for their members rather than for outside investors².

Its core offer is savings accounts, paid into by salary deduction, direct debit, standing order, bank transfer or cheque, together with loans of up to £40,000¹. Rather than paying a fixed rate of interest, it distributes its surplus to members once a year as a dividend on savings, and sometimes as a rebate on loan interest paid¹. Savings are protected by the Financial Services Compensation Scheme¹.

What London Capital Credit Union offers members

London Capital Credit Union offers two things: a place to save and a place to borrow. Members build up savings, and those savings can then be drawn on when needed or used as the basis for borrowing¹. The credit union describes itself as a not-for-profit co-operative that encourages saving as an alternative to borrowing, but also provides loans to members when they need them¹.

On the savings side, it runs a salary savings scheme where payments come straight from your pay, plus accounts you can pay into yourself¹. There is no minimum savings payment unless you have a loan with the credit union¹. On the borrowing side, it offers personal loans of up to £40,000³. For a wider view of how these products compare with bank and building society equivalents, see our guides to savings accounts and loans.

Credit unions generally also offer free help with day-to-day money: paying in or taking out cash, having money paid in such as wages, benefits and pensions, online or telephone banking, and budgeting advice and support⁸. London Capital Credit Union does not offer a full current account in the way a bank does, so check with it directly what account facilities you need before joining.

Who can join London Capital Credit Union

Membership is open to anyone who meets at least one of the credit union's joining criteria⁹. The main routes are:

• Trade union membership: anyone in Greater London who is a member of Unison or Unite⁹
• Co-op connection: being a Co-op member or employee in Greater London or the wider South East region. If you live in the region and shop at a Co-op store from time to time, you can become eligible by instantly joining the Co-operative Group online⁹
• Employer: working for one of the listed employers, which include Barnet Council, Camden Council, City of London Corporation, Citizens Advice, the Co-operative Group, Great Ormond Street Hospital, Legal & General, Linklaters, London Metropolitan University, Unison and University College London, among others, anywhere in Great Britain⁹
• Housing provider: being a tenant or leaseholder of any of the listed housing providers anywhere in Great Britain⁹

Only members can save with and borrow from a credit union⁷. If you are not eligible for London Capital Credit Union, you can search for your local credit union through the Association of British Credit Unions, or by calling 0800 015 3060¹⁰. Credit union membership works on a common bond of location, employer or association, which is what these criteria reflect¹¹.

Savings earn a dividend, not a fixed rate of interest

London Capital Credit Union does not pay interest on its adult savings accounts. Instead, any trading surplus is distributed to members as a dividend on savings, calculated on your average savings over the previous financial year, which runs from 1 October to 30 September⁴. Surpluses may also be returned as a rebate on loan interest you have paid¹.

This is how credit unions generally work: rather than paying a guaranteed rate, the profit the credit union makes is shared among savings accounts as a dividend, with some reinvested to improve services². Two things follow from this. First, the amount varies from year to year with the credit union's performance; a successful year can see members receive a dividend which, across the credit union sector, could be as high as 3%¹¹. Second, no payment is guaranteed, because the value of dividends and loan interest rebates depends on the levels of surplus⁴.

Dividends and loan interest rebates are paid gross of tax, meaning nothing is deducted before you receive them, so you may need to declare the payment to HMRC as part of any tax return⁴. For how savings returns are taxed generally, see our guide to personal tax.

Paying money in: accepted methods and payment references

Members can pay in by salary deduction, direct debit, standing order, bank transfer or cheque¹. Cash is accepted only for initial deposits, and a first deposit made in cash is limited to a maximum of £50¹. There is no minimum savings payment, unless you have a loan with the credit union¹.

Every payment must carry your membership number, or your National Insurance number, as the reference. The credit union states you must use one of these as the reference for every payment, so money arriving without it cannot be matched to your account¹. Cheques should be made payable to 'London Capital Credit Union' or payable to yourself⁴. Bank transfers go to the credit union's own bank account, held at The Co-operative Bank, under the account name London Capital Credit Union¹.

One important restriction: the credit union cannot accept DWP or HMRC payments, other than Child Benefit. You can, though, have your Child Benefit paid directly to your savings account¹. This matters if you were planning to have benefits paid in. In general, benefits are usually paid straight into a bank, building society or credit union account¹³, and Universal Credit can be paid into a credit union account¹⁴, but London Capital Credit Union's own rules rule out most DWP and HMRC payments. Tax credits have ended; you may be able to get Universal Credit or Pension Credit instead¹⁵. The credit union also offers multiple budgeting accounts, so a single payment to it can be allocated across different savings accounts⁴.

Withdrawing your savings: notice and ID requirements

You can withdraw your savings on demand, unless you have a loan with the credit union, but you must allow up to 3 working days for a withdrawal to be processed⁴. The minimum savings withdrawal is £10⁴.

Before a withdrawal can be made, the credit union must have valid proof of your ID and address on record, and you must complete a BACS form to set up the security password for payments⁴. This is a one-off setup, but it means your first withdrawal will take longer than later ones. Credit unions generally ask for two recent documents to prove identity and address, for example a passport, driving licence, student or work ID card, bus pass, birth certificate, bank statement or energy bill⁸.

Borrowing from London Capital Credit Union: how loans are assessed

London Capital Credit Union offers loans of up to £40,000³. Its approach to deciding whether to lend is deliberately different from a bank's: it uses manual credit and affordability checks rather than relying solely on your credit score³. The decision on an application is made by one or more other credit union members on its Loans Panel, guided by two questions set out in its terms: "Do we trust the applicant to repay the loan?" and "Can the applicant afford the loan repayment"¹⁶.

Several practical rules shape how an application goes:

• Credit checks: a credit reference agency check is used to show what money is owed and to whom, and the credit union sometimes conducts a credit check with Experian. Past difficulty repaying loans will not automatically prevent you from borrowing¹.
• Full disclosure: you must list all your debts in the application. Failure to do so is likely to result in the loan not being approved¹⁶.
• Saving first: you can apply at any time, but priority is given to members who have saved for a short period or who use a payroll deduction scheme, and the terms say priority must go to applications from members who have made at least one savings payment¹.
• Deposit on approval: if your application is approved you must make a deposit of £20 before the funds can be paid to you³.
• Repeat applications: unless it is a real emergency, the credit union will not issue a loan within 6 months of your previous application³.
• Evidence of affordability: the 'Your Money' section of its website has a budget planner which, if used and shared, gives the credit union good evidence of affordability. First-time loan applicants may be required to use online Open Banking¹⁶.
• Visa status: if you are not a British citizen, the credit union will need information about your visa status or a Home Office share code³.

If the loan is for debt consolidation, the credit union may sometimes ask you to complete a money guidance session first³. For how credit checks and credit histories work more generally, see our guide to credit scores and credit reports, and for the alternatives, our guide to loans. If you are considering a payday loan, a credit union loan is one of the alternatives worth comparing against¹⁰.

Managing your account online, by phone or in person

Members can register for online access and then check balances, request withdrawals, and apply for or sign for loans online or via the credit union's mobile app¹. You can also check your balance by phone, or by texting the word 'MyBalance' to 60060⁴. If you prefer not to do things online, you can phone the credit union or make an appointment to visit its office, which the credit union describes as accessible¹.

This mix of channels is typical of credit unions, which usually offer online, mobile or telephone banking alongside in-person service⁸. It is a narrower service than a bank current account, though: there is no branch network, and the cheque clearing times and withdrawal processing described above are slower than you would experience with a mainstream bank account. For how opening and running a bank account compares, see our guide to current accounts.

Help with budgeting and debt

The credit union's money management pages are built around two offers: plan your spending, or find free, independent help if you are worried about debt¹⁷. Its Loan Support Officers are described as people who "will find a way to help"¹⁷. For debt consolidation loans, it may ask you to complete a money guidance session as part of the application³.

Free budgeting and debt help is also available outside the credit union. Community Money Advice runs local centres where you can receive budgeting or debt advice¹⁸, and StepChange and other debt charities offer free advice on consolidation and on alternatives to high-cost credit¹⁰. For the full range of options, including where to get free, impartial help, see our guide to debt.

FSCS protection for your savings

Savings with London Capital Credit Union are protected by the Financial Services Compensation Scheme. The FSCS protects up to £120,000 in total across all accounts you hold with the credit union, for individual account holders⁵. The credit union's own site states the figure as £85,000 per person¹; the FSCS's own guidance gives the higher figure, and the FSCS is the scheme's administrator, so £120,000 is the number to work from. The limit applies across all your accounts with this one credit union combined, not per account.

This is the same protection that applies to bank and building society deposits². If the credit union were to fail, the FSCS would pay compensation automatically in most cases; you can read more about how the scheme works in our guide to consumer protection.

Contacting London Capital Credit Union and complaining

London Capital Credit Union's website is www.credit-union.coop⁶. You can contact it by phone, by email, or by making an appointment to visit its office in person¹. Members who prefer not to use the online service can do everything by phone or in person, including checking balances and arranging withdrawals⁴.

If you have a complaint, take it to the credit union first: financial firms are required to have a complaints process and to respond within set timescales. If you are not satisfied with its final response, you can take the complaint to the Financial Ombudsman Service, which is free to use. The 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 214094, which you can check on the FCA Register⁴. It also appears on the Bank of England's list of UK-incorporated credit unions¹⁹. The FCA Register shows it has been authorised since 2 July 2002, and that it was previously known as Islington Council Employees Credit Union Limited, then Islington & City Credit Union Limited, then Haringey, Islington & City Credit Union⁶.