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UK Sets Out Credit Union Reforms Raising Locality Cap to 10 Million

Ministers plan legislation when parliamentary time allows to deliver a Financial Inclusion Strategy pledge.

Overview

  • The government announced changes to widen who can join credit unions across Great Britain as part of a package to modernise common bond rules.
  • The cap on locality‑based credit unions will rise from three million to 10 million potential members to support growth and mergers, and these unions account for 79% of the sector.
  • Eligibility will expand to include students in locality‑based unions, more relatives and household members, and people who wish to remain with or join a union after retirement as full members.
  • Officials say the reforms aim to broaden access to affordable credit and safe savings as alternatives to high‑cost lending.
  • Industry leaders from London Mutual, Scotwest and ABCUL welcomed the plans, though the changes will take effect only after legislation is passed.