Thursday, 26 November 2015


The Irish League of Credit Unions (ILCU) has today published the results a new research project into moneylending in Northern Ireland. With the level of personal indebtedness and financial exclusion in Northern Ireland, the ILCU commissioned this independent research to gain an insight into the relationship that the people of Northern Ireland have with moneylenders and payday loans companies.

Credit unions across Northern Ireland have been campaigning over the past years against moneylenders and payday loan companies believing strongly that some members of the community are becoming trapped in a vicious cycle of debt from which it is very difficult to escape. The research reveals that over 270,000 people in the North have used the services of a moneylender or payday loan company to date with a further 193,000 saying they would consider using this service. These are extremely worrying statistics say the ILCU.

In late 2014, Credit Unions in Northern Ireland welcomed a move by the Financial Conduct Authority (FCA) to introduce a cap on fees and interest rates charged by pay day loan companies & moneylenders. In the case of moneylenders loans are being offered which are up to 15 or more times more expensive than those available from local credit unions.

Credit Unions in Northern Ireland are urging members of the public to approach their local credit union first before approaching a pay day loan company or moneylender. Credit unions, which are owned by their members, are a not for profit movement that specialise in low cost loans at fair rates and basic savings products. Local credit unions are also on hand to offer advice be it by way of savings plans, budget plan or family finance plans which help people plan ahead for expenses throughout the year. There are now 95 credit unions operating in Northern Ireland with a membership of over 400,000, a number which is growing year on year.

Over 25% of those surveyed have had experience of a moneylender / payday loan company, with a further 50% considering using a moneylender/ payday loan company. In general, the research reveals that moneylenders are considered a fall back credit option with 8 out of 10 people feeling that borrowing from a moneylender / payday loan company was their only option and this type of easy access credit has never been as readily available as it is today. 60% stated that their moneylender loan was approved in a matter of hours.

There are many moneylender / payday loan options available but the research reveals that online moneylender (61%) options are most popular among those who have borrowed followed by doorstep lenders (23%) and a money shop (13%). 39% of those who have borrowed from a moneylender stated that they have approached a bank (39%) or a credit union (9%) before they applied for credit from a moneylending source.
Of those that have borrowed from a moneylender, 56% stated that they used the loan to pay household bills or clear bill arrears. A further 23% borrow from a money lender to repay debt, 10% said they borrowed to pay their mortgage or rent and 10% said they borrowed to go on holiday. Of those that would consider borrowing (26% said they would do so in an emergency situation, 23% said as a last resort, 16% said of the fast access to cash and 7% said ease of loan approval. Of those that have experience of moneylenders, 30% said that they are likely to top up their existing moneylender / payday loan.
62% of those who have borrowed from a moneylender have borrowed an amount of between £100 and £750 (AVERAGE) Of those that have borrowed from a moneylender / payday loan company, 11% said they borrowed amounts between £1,500 and £3,000. Of those that have never borrowed before, 40% have said they would borrow the bigger amounts (£1,500+). Those who have borrowed from a moneylender before are more cautious. Unsurprisingly, awareness  / expectation of the level of repayments re highest among those who have borrowed before.
Shockingly, 84%  of those that have used a moneylender / payday loan were unaware of the interest rate / APR being charged on their loan. Only 16% said they were aware of what it was. Those that have used a moneylender / payday loan company  - 885% APR is the average rate being charged. Those who had not used a moneylender before believed interest rates to be much lower than they were. 77% of those that have borrowed from a moneylender in the past have done so between 1-3 times.
27% of those who have borrowed from a moneylender have experienced some level of intimidations with 32% of this group saying they were intimidated because of constant phone calls and emails. A further 21% said they were forced to pay back their loan prematurely, 16% said they were contact in work and 11% there was a threat of physical injury or goods seizure. Of those that have not borrowed from a moneylender before but would consider say they would be put off borrowing from this source because of high interest rates (49%), untrustworthiness (19%), a fear of falling behind on payments (14%). 24% of those who have been approached by a moneylender have been approached in their own home.
Almost half of those who have borrowed from a moneylender were given between 1 and 4 months to repay the loan. 9% were given a week, 12% were given 2-3 weeks, 13% were given 5-10 months and 12% were given 11 months or over. One third had difficult repaying their loan. 48% of those who have borrowed from a moneylender in the past would not consider borrowing again primarily due to the exorbitant cost of credit (58%), 15% believed in led to bad debt, 8% said they didn’t need to borrow at the moment and 19% believed a combination of high interest rates with a struggle to repay.
Moneylenders and pay day loans companies are predators to those struggling financially. They offer almost immediate access to quick credit, but lurking in the small print are staggering interest rates that often result in those who can least afford it paying back nearly twice what they borrow, or worse still, getting caught in a cycle of debt that they cannot get out of. It is very worrying to see that 84% of respondents with experience in borrowing from a moneylender reported that they did not know they APR they paid on their loan. Credit unions in Northern Ireland would like to remind people that they offer fair, competitive loan rates, that are capped by law, which are significantly cheaper than pay day loans or loans from moneylenders. Moneylenders and payday loan companies are quoting loans of £400 over 31 days at a cost of £129 – the same loan from a Credit Union costs about £4.”
It comes as no surprise to learn that households throughout Northern Ireland are finding it increasingly difficult to make ends meet on a daily basis, and with the countdown to Christmas well underway, the financial pressures which many are under are more of a strain than ever, resulting in people turning to expensive sources of credit. Ahead of the Christmas holidays we would urge everyone to careful consider their budgets, look at what they can reasonably afford and if there is a need to borrow to do so sensibly through your local credit union and not through high interest ‘fast’ cash moneylending services. As Christmas looms, we would encourage anyone facing financial difficulties to speak to their credit union first and see how they can help before getting trapped in a vicious debt spiral of interest and charges at the hands of unscrupulous lenders. Unlike other lenders we are a not-for-profit community owned organisation and exist solely to meet the needs of our members.’

Wednesday, 25 November 2015


With a mere matter of weeks to go until Christmas, many families around the country are deep in preparations for the Christmas holidays and though it is a time of joy, it can also be a very financially stressful time. We all need to remember that Christmas really is about giving.....not robbing the family finances. People can be savvy when it comes to shopping at this time of year. For example, starting early to avoiding getting caught up in 'panic buying' can really help keep costs low and provide the family member sufficient time to search for the best deal. Online can be great for locating some great value but keep an eye on the mail, courier or delivery costs.

The 2015 ILCU Christmas Spending Survey reveals that 30% feel better about their financial situation in the run up to Christmas 2015. This represents a slight improvement compared to 29% in 2014. Men (33%) compared to women (26%) are happier about their finances. 65% say that Christmas will still be enjoyable despite financial worries (up from 62% in 2014) but 25% still worry about their finances and how they will cope over Christmas.

Irish consumers expect to spend on average €563 this Christmas compared to €600 at Christmas 2014. Middle aged and mature adult likely to spend the most amount of money this Christmas. Overall females are spending more (€564 in 2015 v €588 in 2014 for women) than men (€562 in 2015 v €614 in 2014 for men. The provincial breakdown of spend in 2015 is as follows:

·         Dublin - €544
·         Rest of Leinster - €597
·         Munster  - €587
·         Connacht/ Ulster - €510

There is a strong belief (79% up from 71% in 2014) that Irish people spend too much money on Christmas. However, 68% said there is nothing better than a proper Irish Christmas and for 58% spending time with family is the most important part of the festive season. 44% will have sufficient money in their monthly income to pay for Christmas this year. This is an increase from 36% in 2014. More males (46%) than females (43%) are in this position. A further 23% are likely to dip into their general savings as the main source or 16% into savings specifically for Christmas.

Nearly half of all consumers (45%) will have to borrow money to get through the Christmas period. This is down from 51% % in 2014. The average amount to be borrowed this year is estimated at €388, down from €417 in 2014. Female consumers are more likely to borrow than males (46% of females compared to 43% of males) but male consumers are likely to borrow more (€408 for males compared to €364 for females)

65% say that this Christmas will still be enjoyable regardless of financial worries (up from 62% in 2014). 25% will still worry about their finances and how they will cope over Christmas, down from 30% in 2014. Females rather than males are likely to worry more about their finances and the Christmas spending season than males.

There has been a slight increase in the numbers using or considering using the services of a moneylender in 2015 (9%) compared to 2014 (8%). 5% say that they have approached a moneylender in the past to cover Christmas expenses and would consider doing it again. 3% have approached a moneylender in the past but would not consider doing it again, Additionally, 4% have never approached a moneylender but would consider this an option in 2015.

On average it will take consumers 8 ½ weeks to recover from over-spending at Christmas time, this is on par with findings in the 2014 Christmas study.  4% will take over 9 months to recover from over-spending. Male consumers are likely to recover faster (7 ½ weeks) compared to females (9 weeks).

The majority of Christmas food shopping will be done in the major Supermarkets. 31% of all Christmas food shopping is likely to take place in Tesco, Additionally, Aldi and Dunnes Stores are likely to attract 19% and 16% of Christmas food purchases, followed by Supervalu (15%) and Lidl (10%).Consumers continue to show mixed sentiment towards perceived value on the high street in Ireland. 36% feel that there isn’t good value available when it comes to Christmas shopping and additionally 51% feel they need to shop around to get good value. Only 13% of all adult consumers agreed that there is good value out there.

Less than 1 in 5 believe that there is good value in restaurant, hotels, bars over the Christmas period, a drop from 20% in 2014. A further 27% feel that there is good value but additional costs like travel, babysitters etc. can make a night out very expensive. 57% of all consumers feel that there isn’t good value when it comes to enjoying a night out over Christmas, the figure is up from 55% in 2014.

67% plan to shop online for Christmas presents this year, on par with 2014. Females (70%) and young adults (73%) are most likely to do this. Better value continues to be the main reason for shopping online. Amazon is still likely to be the most popular destination for Christmas shopping online. The majority of consumers (81%) tend to browse online for products before going into shops to make a purchase. 79% of all shoppers feel secure paying for goods and services online (on par with 2014 figures). A further 16% can sometimes get worried that their details will be
Parents in Ireland plan to spend an average of €167 on Santa presents this year for their children, this is a fall from €180 in 2014. 

Spending time with family continues to be the most important element of Christmas in Ireland. 68% say there is nothing nicer than a proper Irish Christmas. More than 4 in 10 adults say they find Christmas a stressful time of year and over a third said they will really miss family members who have emigrated and won’t be home for Christmas. There is a general belief that Irish people spend too much on Christmas (79%), two thirds of people say they enjoy giving presents rather than receiving them.

Setting a Christmas spending budget is more important now than ever, as is writing a list as this will allow you to keep tight control on the Christmas shopping costs. It is worrying to see that some people are considering using a moneylender this year. the ILCU and credit unions would echo warnings about avoiding high interest rate moneylenders. Using a moneylender can result in consumers getting trapped in a cycle of debt which can be hugely difficult to break free from. If you feel that you need to borrow, want to put in place a savings plan or would like some advice on putting a budget plan together, speak to your local credit union. If you are not a member and would like some further information on how to become a member, visit

Thursday, 19 November 2015

NI and ROI Qualify, European Championship 2016 – Be There…

Monday night’s heroic victory against Bosnia and Herzegovina at Dublin’s Aviva Stadium means that the Republic of Ireland will now join Northern Ireland in France next June for the European Championship 2016. Credit unions across the island of Ireland have historically had a very good relationship with travelling football fans and Euro 2016 will be no exception. It is likely that credit unions in many local communities around the country will see an increase in loan inquires & applications as Irish and Northern Irish fans plan ahead for their trip to France next year, as the Irish did for the European Championships in Poland in 2012. This will be a welcome development for credit unions as they have over €5 billion available to lend. We urge all football fans to look at the full cost of the trip in detail ensuring they cost everything from travel, accommodation, food etc.
In the coming weeks in the aftermath of the celebrations football fans will start looking at their finances in order to plan their Euro trips, and the amount of money they will need to budget is depending on how far our boys progress in the tournament. The credit union is a great place to save for a trip abroad and undoubtedly credit unions will receive many requests for savings plans or loan applications in the weeks and months ahead. Our advice to those fans wishing to travel to France would be to start a savings plan now. Even if it’s only a very small amount, start saving regularly. The tournament is just over seven months away, this gives people 30 weeks to get their finances in order. This will mean that when it comes to booking flights and accommodation they are in a position to pay for them and are not getting themselves into debt to cover the costs. This also puts them in a better position to obtain a loan, should they need it. Credit unions have some of the most competitive loan rates on the market including some great promotional holiday and personal loan rates.  
Football fans must now wait in anticipation until December 12th to discover who we will face in France next June, but the perils of what may lie ahead can be considered another day as for now, all that matters is that both Ireland and Northern Ireland are there. There is nothing like a massive sporting event to bring communities together. This is a special time for people to get behind their teams. As we come together as a community to support the Irish and Northern Irish football teams, in this, one of the biggest football tournaments, we want to remind people that their credit union is there to help – through savings, loans, budgeting, money management advice, it’s as easy as visiting your local credit union and speaking to a member of staff.