Local Swindon resident and council worker, Andrew Hill, has launched a scheme that has saved serious amounts of money for his local council and its members.
Working closely with the Wiltshire and Swindon Credit Union, he has engineered a system that allows members of the council and credit union to put a small portion of their salary aside for a rainy day, generating savings of over £300,000 since launching in 2019.
With the intention to avoid reliance on payday lending and loan sharking, Hill explains that banks will typically try to ‘lend you large amounts over longer periods, so if you need a few hundred pounds for a broken down fridge, they are not interested.”
“But the intention of the scheme is to help people for maybe 18 or 20 months before they get into debt and have to call upon the Citizens Advice Bureau for help.”
With the “save-as-you-earn” system created by Andrew and the Wiltshire and Swindon credit union for employees of Swindon Borough Council, tiny amounts of money are automatically deposited with the union from members’ salaries.
He said: “The council has a relatively high proportion of staff on lower salaries – and it’s those workers who are most vulnerable to financial difficulties, needing loans.
“We want to be able to get it up and running and then show that it works to other organisations and companies.”
High cost lending is rampant but there are alternatives
Andrew Hill’s scheme is a very innovative way to offer low cost loans to people who need money to see them through the month. Or in the case of this scheme, it is money that they have already put aside for a rainy day and collectively helps other members of the union or council which is very promising.
Payday loans are very appealing, due to the fast turnaround of funds, with some lenders offering transfers of 15 minutes or 1 hour. However, these loans often carry high interest rates that exceed 1,000% APR or due to strict regulation, they are very tight with their lending criteria and only accessible to the minority.
There are other alternatives to borrowing money if you wish to avoid payday loans or you are not a member of a credit union.
If you are looking for a short term loan, you might want to consider a low-rate credit card that comes with a 0% introductory fee if you pay it off on-time. There are also peer to peer lenders who offer rates from other people who are looking to invest in short term loans. These carry very low rates when compared to other credit options and there are also innovative lenders such as Fund Ourselves who offer interest-free payments if you are struggling to repay and need to extend your loan.
Another very popular option is to borrow money from family and friends or to sell items online that you do not need. Beyond the regular car boot sale, it has never been easier to put clothes on eBay or Vinted or sell items you don’t want on Facebook Marketplace and clearing out your cupboards could generate a few hundred or thousand pounds.