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Local credit unions support efforts to reduce re-offending

New report finds credit union accounts improve the prospects of people leaving prison

Research carried out by Unlock and the Research Unit for Financial Inclusion at Liverpool John Moores University has highlighted 13 credit unions working in partnership with 21 local prisons to reduce re-offending. Credit unions are providing savings accounts to people in prison, with some offering a current account on release.

The Unlocking Credit Unions report, launched at Parliament today, shows that membership of a community financial institution can have positive economic, social and psychological effects that support desistance from crime. It also suggests that credit unions may be critical in delivering flagship reforms within the justice system, including the Work Programme and Universal Credit. However, the report also questions how sustainable such partnerships are in the light of budget cuts and argues they must be properly resourced.

With stable housing and work as the key factors in reducing re-offending, local initiatives by credit unions have been welcomed by prison staff involved in resettlement.

“[Access to credit union services] opens up a market with regards to employment and accommodation that would not have normally been available…It is an important aspect of the resettlement process”.
– Prison Officer quoted in the report

The high rate of re-offending immediately after prison has been linked to the £46 ‘discharge grant’, which often has to last several weeks before wages or benefits come through. With average prison wages estimated at below £10 a week, opportunities to save are limited. However, credit unions have inspired some people in prison to save to avoid reliance on state benefits on release.

One person featured in the report is Charles. Before coming into prison he had never had a bank account and managing in cash had caused problems due to his drug problem. In prison, the credit union inspired him to save for a motorbike. In two years he saved £800 which he was able to take with him when on release. He said:

“I only used prison toiletries and never used the phone. I went without to save for the bike…it made me feel brilliant; it was a sense of achievement. It was probably the first time I had saved in my life and it made me feel good. I felt proud and normal” – Charles, a person in prison

The report also highlights how credit unions could help families who send money in to loved-ones in prison. Increasingly hard-pressed families are currently forced to use postal orders, which incur a 15% charge.

Nine further credit unions are working with local probation, charities and housing associations to provide services to people in the criminal justice system and their families.

Chris Bath, Executive Director at Unlock and co-author of the report, said: “Access to basic financial services is a keystone to leaving crime behind and building a positive life; working, paying taxes, spending and saving. Partnerships between credit unions and justice agencies have the potential to help deliver that, but they must be properly resourced to be effective.”

Paul A Jones, Reader in the Social Economy at LJMU and co-author or the report, added: “The unique contribution of credit unions is enabling people to save whilst in prison. Saving builds people’s confidence, self-worth and ability to plan for the future, all of which are important if people are desist from crime and resettle effectively in the community”.


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