Makerfield MP Yvonne Fovargue urges Wigan residents to use credit unions instead of loan sharks during cost-of-living crisis

People are warned to steer clear of loan sharks and high-cost lenders, and instead use credit unions, community lenders and benefits calculators.

Data from financial inclusion body Fair4All Finance shows 94,376 adults in Wigan are in financially vulnerable circumstances.

Nationally, as many as 1.1m Brits may be in the hands of illegal lenders and a fifth of adults had less than £100 in savings before the current financial crisis.

Makerfield MP Yvonne Fovargue is encouraging Wiganers to explore how the sector can help them.

She said: “With so many people finding it incredibly tough right now to put food on the table and keep their home warm and lit, I am seriously concerned that scammers and loan sharks will take advantage of their desperation.

“Being able to find the right kind of financial support is critical, but people are finding that there are fewer options than ever, particularly if they’ve been turned down by financial providers previously.

"Community lenders are potential lifelines to many; they do amazing work building households’ financial resilience, helping them to ensure that unexpected bills or extra expenses do not plunge them into crisis. Credit unions have been doing this for decades, but sadly it can be easy to overlook them, because they don’t have the marketing budgets of more expensive lenders.”

The call comes as Fair4All Finance supports the community finance sector as it comes together for the first time to raise awareness of credit unions and community lenders.

They currently help thousands of people in Greater Manchester to cover essential or unexpected expenses, as well as supporting members to put what money they can aside as savings.

An alternative to high street banks, credit unions are not-for-profit and will only lend if it is the right thing for an individual’s finances.

Lauren Peel, from Fair4All Finance, said: “Credit unions and community lenders have decades of experience in supporting households across the UK to save and borrow. They are experts in lending responsibly, whether that’s to people who are well-off or to those in vulnerable circumstances. They are a key sector as we go through a distressing cost-of-living crisis. Lenders such as these, and the benefits calculators available online, could be vital resources as people try to navigate this difficult time.”

Fair4All Finance is also urging people to make sure they are claiming the correct benefits by using online benefits calculators, which can help increase incomes by hundreds of pounds a month.

Matt Bland, chief executive officer at The Co-op credit union, said: “We have thousands of members across Greater Manchester and want everyone in the area to feel reassured in knowing that organisations like us are here, ready to support more of you to take control of your finances and navigate these tricky times.”

Cath Williams, at the England Illegal Money Lending Team, said: “Loan sharks are currently preying on people’s desperation right now and offer nothing more than a vicious cycle of debt and misery in return.”

Search for a credit union at www.findyourcreditunion.co.uk or find other community lenders at FindingFinance.org.uk