Somerset Community Credit Union

Somerset Community Credit Union is a member-owned credit union serving people in Somerset, and it accepts deposits from its members¹. It appears on the Bank of England's list of credit unions incorporated in the UK, and its website is www.somersetccu.uk¹.

Credit unions are non-profit, community-based organisations, and all of them offer savings and loans³. Somerset Community Credit Union holds permission to accept deposits, which is what allows it to take members' savings¹. Its savings are held as shares in the credit union rather than as a bank deposit, which matters for how withdrawals work and for how the money is protected.

The credit union's own policy statement says it is committed to providing good outcomes for its members, and that existing products are reviewed to ensure they are suitable for members' needs and deliver good outcomes⁵.

What Somerset Community Credit Union offers its members

Somerset Community Credit Union is a savings and loans credit union. Across the sector, all credit unions offer savings and loans, and many offer a wider choice of additional products such as junior savings accounts, Christmas savings accounts, prepaid debit cards, insurance products, cash ISAs and, in some cases, mortgages³. Larger credit unions offer extra services including Christmas savings accounts, cash-based Child Trust Funds, ISAs, budgeting accounts, current accounts and debt management, though the features vary between firms⁴.

What a particular credit union actually provides depends on its size and its membership. The pattern across the sector is that savings are the foundation: members build up a share balance, and that balance is what makes them eligible to borrow. Loans are then offered from the pooled savings of members rather than from outside investors, which is what makes the model a cooperative one⁷.

For a reader trying to work out what is available locally, the practical step is to check the credit union's own website, since product ranges differ. The Find Your Credit Union website at www.findyourcreditunion.co.uk can help you locate a credit union, and the Association of British Credit Unions can also point you to your local one³.

If you are comparing what a credit union offers against a bank or building society, the credit unions guide sets out how the model works, and the savings guide and loans guide cover the wider market.

Savings as shares: how withdrawals work

Money you save with a credit union is held as shares, not as a bank deposit. That single difference explains most of what follows about withdrawals, security against loans and protection.

Withdrawals are made on request. One credit union states plainly that you may withdraw your savings upon request¹⁰. Another says it will normally process a share withdrawal within five working days, often quicker⁹. Timescales are set by each credit union rather than by a single industry rule, so the figure to work from is the one your own credit union publishes.

Some accounts carry their own conditions. A Christmas savings account, for example, may be secured until 1 October each year, withdrawable up until 31 December, with any remaining balance secured again until the following October⁸. Term deposit accounts are subject to their own terms¹¹. If you are saving towards a specific date, the account's terms matter more than the general rule.

Withdrawals can be restricted while you have a loan

This is the condition that catches people out. When you borrow from a credit union, your savings are commonly used as security for the loan, which means the money is not free to withdraw while the loan is running.

The detail varies between credit unions:

• One credit union's terms say savings can be withdrawn at any time subject to any outstanding loan balance preventing you from doing so, and that it holds a right of lien on all savings balances if a loan defaults¹².
• Another says that once a loan has been granted, members will not be permitted to withdraw shares unless the value of the shares exceeds the outstanding loan balance and all loan repayments are up to date¹³.
• A third allows any money saved after the loan is granted to be withdrawn, provided the loan is not in arrears¹⁴.
• A fourth secures share savings so they are available to withdraw only when the loan is repaid⁸.

If you miss payments, the position is firmer still: independent guidance states that the credit union may be able to use your savings to repay the loan¹⁵.

How to join and open an account

Credit unions have a common bond, which means membership is limited to people who share a connection, usually where they live or work. One Somerset credit union, Mendip Community Credit Union, states that membership is open to anyone who lives and/or works within the Mendip area in Somerset¹⁸. Somerset Community Credit Union will have its own equivalent area, and its website is the place to confirm the firm's details¹.

Joining is usually straightforward, and the route depends on the credit union:

1. Check the credit union's own joining page to confirm you are eligible under its common bond¹.
2. Apply online or in branch, depending on what the credit union offers¹⁹.
3. Provide identification where required. One credit union asks for two forms of identification if you join in branch¹¹.
4. Meet a volunteer in person at a service point, if that is how the credit union operates¹⁸.
5. Keep a minimum share balance to stay a member and to be eligible to borrow²⁰.

Membership terms form part of your agreement with the credit union, and one credit union describes its membership handbook as forming part of the membership agreement, to be read alongside the rules and any individual credit agreement or product-specific terms²⁰.

Support for members in financial difficulty or vulnerable circumstances

Credit unions exist in part to help members in need of financial support, and they extend support to people on a low income or people who have never borrowed before⁷. That is a different starting point from a commercial lender.

Somerset Community Credit Union's own policy statement says staff will be trained to identify financial vulnerability and members will be provided with support according to their needs⁵. That is a commitment about how the credit union handles members who are struggling, rather than a product in itself.

If you are in financial difficulty, the wider support system matters as much as the credit union, and it differs across the UK:

There is also help with the costs that push people into difficulty. Local welfare funds and resilience services fund services delivered by councils or other providers to improve financial resilience for support users²⁴. Council tax reduction schemes vary by area, and one case reported in Somerset involved a disabled resident whose support fell to around £2 a week after migrating to Universal Credit because the scheme counts the limited capability for work element²². For families with children, there is help with education costs for students in vulnerable groups in England, including those in or recently left local authority care, those getting Universal Credit because they are financially supporting themselves, and those getting Disability Living Allowance in their own name alongside Universal Credit²⁵.

If you are dealing with debt, free and impartial help is available. StepChange and National Debtline both provide guidance, and the debt guide covers the options in full. Business Debtline also has guidance on debt and mental health, and on complaining about your lender²⁶.

How products are reviewed for members' needs

Somerset Community Credit Union's policy statement says existing products are reviewed to ensure they are suitable for members' needs and deliver good outcomes⁵. That is the credit union's own description of how it approaches product design.

Across the sector, credit unions assess loan applications in ways that go beyond a credit score. One credit union says applications are assessed based on your credit file, affordability and your personal circumstances, not just your credit file alone²⁹. Another says all loans are subject to credit assessment and affordability checks, with rates varying by product and individual circumstances³⁰. A third says loan applications are considered by the loans committee and/or approved counter staff¹⁴.

That matters for anyone whose credit history is thin or damaged. The assessment is not purely automated, and the decision can take account of circumstances a scoring model would miss. It does not mean approval is guaranteed, and it does not mean the loan is cheap: rates vary by product and by individual circumstances³⁰.

Making a complaint to Somerset Community Credit Union

Somerset Community Credit Union's policy statement says it will aim to respond within 2 working days⁵. That is its own target, and it is quicker than the sector-wide deadline.

Credit unions generally have eight weeks to investigate a complaint and give a final response⁴. One credit union's complaints policy states that it will attempt to resolve the matter within eight weeks of receipt of the complaint, and that most routine complaints will be resolved within two working days³¹. Another says it intends to provide a satisfactory final response within 8 weeks of receipt³². A third says a response is given within two working days³³.

Complaints can usually be made in several ways. One credit union accepts complaints in person, by letter, by telephone or by email³². Another accepts a complaint in writing or orally to an officer or volunteer, in person, by letter, by telephone or by email, at any place the credit union conducts business³⁴. The Financial Services Compensation Scheme accepts complaints over the phone or in writing, or using a contact form³⁵.

If you are unhappy with the final response, or eight weeks pass without one, you can take the complaint to the Financial Ombudsman Service⁴. The ombudsman service is free to consumers. If your complaint is about a credit-repair company rather than the credit union itself, you can also complain to the Financial Ombudsman Service about that³⁶.

How your savings are protected

Savings held as shares in a credit union are eligible for protection under the Financial Services Compensation Scheme, and credit union loans and savings are protected by the scheme³⁷. That protection is the same scheme that covers bank and building society deposits, and it applies per person, per firm.

If a credit union failed, the scheme says it returns money in most cases within seven working days from the date the credit union failed³⁸. The scheme's general guidance states that you will get your money within seven working days of a bank, building society or a credit union failing³⁹. That is faster than many people expect, and it is worth knowing before you need it.

You can check whether your money is protected using the Financial Services Compensation Scheme's checking tool³⁹. The scheme also publishes specific guidance on deposit protection for credit unions³⁸.

Protection covers the money you hold with the credit union, but it does not cover everything. It does not prevent a credit union from restricting withdrawals while you have a loan, and it does not cover the cost of borrowing. If you have a loan outstanding when a credit union fails, the loan and the savings are both part of the picture, and the scheme's guidance on credit unions sets out how that is handled³⁸.

For the wider picture on what is covered and what is not, the consumer protection guide covers the scheme and the ombudsman service, and the credit unions guide explains how the model differs from a bank.