Muckamore Credit Union

Muckamore Credit Union is a Northern Ireland credit union that takes savings from its members and lends back to them. It runs adult, junior and Christmas savings accounts, three tiers of loans, and pays an annual dividend on members' savings. Adult accounts carry a joining fee, and there is a minimum to activate an account¹.

It is a member-owned body rather than a bank. Members share a "common bond", which for credit unions generally means living, working, studying or volunteering in a certain area, working in the same industry or for certain employers, or belonging to the same trade union². Only members can borrow³.

Savings with Muckamore Credit Union are covered by the Financial Services Compensation Scheme up to £120,000 per member⁴. The credit union is authorised by the Financial Conduct Authority and appears on the Bank of England's list of UK credit unions⁵.

Savings accounts at Muckamore Credit Union

Muckamore Credit Union offers three kinds of savings account: an adult account, a junior account for children, and a Christmas saver. The credit union states there are no transaction charges or fees on savings or loans, and that members do not pay a transaction fee for saving or borrowing⁸.

The adult account is the main savings account. You can pay in by cash over the counter, by debit card, or by standing order⁸. Across credit unions generally, members can also pay in by payroll deduction from wages, through benefit direct accounts, through retail payment networks such as PayPoint and PayZone, by direct debit, or in cash at a local office or collection point². Universal Credit is paid into a bank, building society or credit union account, so a credit union account can receive it¹⁰.

Junior accounts are available for children up to the age of 16¹. A person other than a parent may open an account for the junior member, but only the parent or legal guardian may withdraw money from it¹. Junior accounts are excluded from the credit union's Benevolent Scheme⁸.

The Christmas saver is open once you are enrolled as a member of Muckamore Credit Union⁸. Christmas savings accounts are a common credit union product, alongside junior savings accounts, prepaid debit cards, insurance products and cash ISAs². For how these compare with other savings, see savings accounts.

The annual dividend and who qualifies for it

Credit unions normally pay a dividend to members once a year, and the amount depends on how much you have saved and how much profit the credit union has made¹¹. Muckamore Credit Union states that all members, senior account holders, junior members and Christmas account holders qualify for a dividend, and that the dividend is normally paid out each year in February, directly after the annual general meeting, where it is decided⁸.

A dividend is not interest and is not guaranteed. It is declared after the end of the financial year, and each share held for that year is eligible; the more shares held, the greater the dividend¹². Because it depends on the credit union's results, the rate can vary from year to year, and in a year where the credit union does not declare one, nothing is paid. The credit union's own site carries the current position.

Loans: how the three tiers work

Muckamore Credit Union offers three loan types, described as Tier 1, Tier 2 and Tier 3, and its loan calculator lets you work through each⁷. The maximum loan amount is £7,500, over a maximum term of 60 months⁷. The credit union also states that members get money back from borrowing with it⁷.

Tiering is a way of sorting borrowers by how much risk the credit union is taking. In tiered lending generally, lenders who have lent at the lowest tier are paid first on any capital and interest repayment, then the next tier up, and so on¹³. That structure is used by other lenders and is not specific to credit unions; what matters for a borrower is which tier they are placed in and what that means for the terms offered.

Credit union borrowing is usually at a low interest rate, and repayments can have some flexibility¹⁴. Some credit unions lend as soon as you become a member, while others lend only after you have saved for a set period, and affordability is checked against the money you have left after paying bills⁹. For borrowing more generally, see loans.

Who can borrow and what the credit union looks at

Only members can borrow from a credit union³. Muckamore Credit Union states that members can take out flexible loans three months after joining, and recommends saving consistently for a minimum of 13 weeks, or three months, before applying, though loans can be granted earlier at the loans committee's discretion¹.

The credit union says it looks at the purpose of the loan, your ability to make repayments, your pattern of savings and your previous loan repayment history⁷. You will need your last three months of bank statements, your last three payslips, and details of household income and expenditure⁷.

Credit unions generally consider credit applications from people with poor credit ratings, which is one reason they are used by people who have been turned down elsewhere¹⁵. That does not mean approval is automatic: the assessment above still applies, and the amount lent is capped at £7,500⁷.

Fees and charges on savings and loans

Muckamore Credit Union states there are no administration charges, hidden fees or transaction charges, and no transaction charges or fees on savings or loans⁸. Adult accounts carry a joining fee, and a minimum is needed to activate an account¹.

That pattern is common across the movement. Moray Firth Credit Union states there are no upfront fees or charges for arranging a loan, and no hidden charges, arrangement fees or early repayment charges¹⁶. Ulster Federal Credit Union states there are no hidden fees or transaction charges on its loans¹³.

Not all borrowing works this way. Under the Green Deal scheme, for example, you can pay the loan off early but there may be extra costs¹⁷. Credit union accounts are not entirely free of charges either: where a credit union offers a current account, there is often a monthly account fee for a debit card, setting up regular payments such as Direct Debits, and overdraft access¹⁸. For the current figures on Muckamore Credit Union's own accounts, its site is the place to check.

Free insurance on savings and loans

Muckamore Credit Union states that all its loans are fully insured for free against disability or death, and that members' savings are placed in its Life Insurance scheme, offering a free insurance system on savings¹. Most credit unions offer free life or loan-protection insurance⁹.

The effect for a borrower is that 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 full⁹. Muckamore Credit Union puts it in similar terms:

You will be asked to nominate a beneficiary, the person you want your money paid to when you die, and you can change the name of your beneficiary at any time⁸. Junior accounts and club or society accounts are excluded from the Benevolent Scheme⁸.

How to join Muckamore Credit Union

To join, you fill out a membership application form and provide two forms of identification: one item from List A, which is photographic ID, and one item from List B, which confirms your address¹. The photographic ID list includes a current UK or Republic of Ireland driving licence, a current UK or Irish passport, a bus pass, an electronic ID card, a firearms certificate, and a national ID card for non-UK nationals only¹.

For a junior account, the credit union will accept a birth certificate for infants, or for older children perhaps a copy of their passport¹. Other credit unions ask for the child's long-form birth certificate or legal paperwork, plus photo ID and proof of address from the parent or guardian opening the account¹⁹.

Credit unions generally ask you to visit or call to confirm what information they need to join². The credit union also runs a Benevolent Scheme for members who joined before the age of 75⁸. For the wider picture on how these bodies work, see credit unions.

1. Complete a membership application form¹
2. Provide one item of photographic ID from List A and one item confirming your address from List B¹
3. For a junior account, provide the child's birth certificate or passport¹
4. Pay the joining fee and the minimum to activate the account¹

Applying for a loan and how the money is paid

Applications are made through the credit union's online loan application for full members over 18⁷. Loans are issued either by cheque or by bank transfer to a member's bank account⁷.

The credit union states that members get money back from borrowing with it, and that you can pay off your loan faster with no extra costs⁷. That is a common feature of credit union lending: T.P.M. Credit Union, for example, lets members pay off a loan early, make additional lump sum repayments or increase regular repayments without a penalty²⁰, and Ulster Federal Credit Union states the same¹³.

Repayment frequency varies between credit unions, with weekly, fortnightly, four-weekly and monthly options available at some²⁰. Muckamore Credit Union's maximum term is 60 months⁷.

If you fall behind on loan repayments

Muckamore Credit Union states that failure to repay a loan will result in all actions available to it being taken, including debt recovery agencies and court action, with all associated costs added to the outstanding debt⁷.

There is a specific rule that catches credit union borrowers: if you miss payments on a loan, the credit union may be able to use your savings to repay the loan²¹. That means money you have built up in a savings account is not ring-fenced from a loan in arrears.

Missed payments also leave a mark. Arrears show on your credit reference agency records as being behind with your payments, which may limit your ability to access credit in future²². Regulated creditors must send you arrears letters if you fall behind²⁴.

If repayments become unaffordable, the earlier you raise it the more options there are. Free, impartial help is available from MoneyHelper and from debt advice charities such as StepChange and National Debtline, and advice services in Northern Ireland. For the full range of options, see debt.

How your savings are protected

Savings with Muckamore Credit Union are covered by the Financial Services Compensation Scheme up to a total of £120,000 per member⁴. All shares, meaning savings, in an affiliated credit union are eligible for protection under the scheme²⁵, and credit union loans and savings are protected by it²⁶.

The credit union is authorised by the Financial Conduct Authority, with firm reference number 573320⁵. It appears on the Bank of England's list of credit unions incorporated in the UK⁶. Its permissions include accepting deposits⁵.

For how the scheme works and where protection stops, see consumer protection.