What is a credit union?
A credit union is a financial co-operative owned by its members, not by external shareholders. Instead of existing to generate profit for investors, a credit union exists to help its members save safely, borrow affordably and promote financial inclusion.
Central Credit Union is one of these, serving people across the Liverpool City Region, West Lancashire, Wigan, Warrington, and Cheshire West and Chester.
When you save or borrow with a credit union, you become a member and a part-owner.
Every member gets a say in how it’s run, and any surplus goes back into better rates, dividends, services, and community support. It never goes to external shareholders.
Quick answer
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Not-for-profit and member-owned. Any surplus is returned to members or reinvested into the community, not paid to outside shareholders.
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Each member has a vote on how the credit union is run – one member, one vote – at the Annual General Meeting (AGM), regardless of how much you save.
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Rates capped by law. In England, Scotland and Wales, the maximum loan interest rate that can be charged is 42.6% APR.
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Savings protected up to £120,000 by the Financial Services Compensation Scheme (FSCS). The same protection as a bank.
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Regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).
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Open to anyone with a common bond. For Central Credit Union, that’s living, working or studying in the Liverpool City Region, West Lancashire, Wigan, Warrington, or Cheshire West and Chester.
How does a credit union work?
Members’ savings are pooled together and lent back out to other members as loans. This is the core principle: your savings help fund someone else’s affordable loan, and vice versa.
As credit unions are owned by their members rather than external shareholders, decisions are made in members’ interests. Each year, members are invited to the Annual General Meeting (AGM), where they can vote on key decisions and hear how the credit union has performed, on a one member, one vote basis.
Who can join a credit union?
In order to join a credit union, you need to share a “common bond” with its existing membership. This is usually based on where you live, where you work, or an organisation you belong to. A common bond is specific to each credit union.
To join Central Credit Union, you need to live, work or study in one of the following areas:
- Liverpool City Region
- West Lancashire
- Wigan
- Warrington
- Cheshire West and Chester
What’s the difference between a credit union and a bank?
Credit unions and banks both offer savings accounts and loans, but they’re structured differently.
Credit union |
Bank |
|
Ownership |
Member-owned and not-for-profit | Shareholder owned and profit-driven |
Who can join |
Common bond eligibility required | Generally open to anyone |
Savings return |
Annual dividend (not guaranteed and rate decided at the AGM based on the annual performance of the credit union). There may also be interest rates (AER) given on some products – this will vary between credit unions | Fixed or variable interest rate |
Loan interest cap (APR) |
42.6% APR maximum (in England, Scotland and Wales) 12.68% APR in Northern Ireland |
No legal cap. Set by lender and often influenced by the Bank of England |
Advertised loan rate (APR) |
The interest rate (APR) you see is the rate you get | Often a representative rate. This can change after you apply for a loan |
Hidden charges |
None on most products | Varies by lender |
Say in how it’s run |
Yes. One member, one vote at the AGM | No |
FSCS protection |
Yes, up to £120,000 per person | Yes, up to £120,000 per person |
Free loan and savings protection insurance |
Often included | Rarely included |
What are the benefits of joining a credit union?
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Fair, capped rates. Loan interest is capped by law, so there is a ceiling on what you will be charged.
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Interest reduces as you repay. Loan interest is calculated on your declining balance, so the amount of interest you pay falls as the loan is paid down, rather than being fixed on the original amount borrowed.
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You’re an owner, not just a customer. Profits are reinvested in better services or returned to members, not paid out to external shareholders.
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A voice in decisions. Members vote at the AGM on a one member, one vote basis.
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Encourages saving alongside borrowing. Many credit union loans build a savings habit at the same time.
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No hidden fees on most products, and often free loan protection insurance included.
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Community-focused. Surplus is reinvested locally, supporting financial education and community initiatives rather than external investors.
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Many provide free life insurance for loans and savings
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Protected savings. Covered up to £120,000 by the FSCS, the same as a bank.
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Regulated and safe. Overseen by the FCA and PRA, held to the same regulatory standards as high street banks.
Ready to join?
Joining Central Credit Union goes beyond loans and savings. It means financial security, fair access to credit and being part of a community that puts people first. Become a member today and take control of your finances with confidence.
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Start Saving
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Looking to borrow?
Frequently asked questions
Both are equally protected. Credit union savings are covered by the FSCS up to £120,000, the same limit that applies to banks, and both are regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Whilst a good or excellent credit score may help, you don’t necessarily need good credit to become a member. When you apply for a loan, Central Credit Union looks at your full affordability – income, outgoings and overall circumstances – rather than relying on a credit score alone.
By law, credit unions in England cannot charge more than 42.6% APR (3% per month on a declining balance) on loans.
Yes. Many members keep a bank account for everyday spending and use Central Credit Union for saving or for a more affordable loan alongside it.
Anyone living, working or studying in Liverpool City Region, West Lancashire, Wigan, Warrington, or Cheshire West and Chester can join, provided they meet Central Credit Union’s membership criteria.
As credit unions are not-for-profit, we prefer to use the term ‘surplus’ instead of ‘profit.’ Any surplus made is either returned to members as a dividend or reinvested into the credit union (improving rates, services, and community initiatives) rather than paid to outside shareholders.