Abcul, which is the Association of British Credit Unions, put the plan together with the Building Societies Association, ACE Credit Union Services, and three or four other sector bodies. Matt Bland, Abcul’s chief executive, said credit unions are “uniquely well placed to grow their reach and impact at a time when financial inclusion, resilience and mutual models matter more than ever,” which is the kind of statement that sounds like it was written by committee but also happens to be roughly correct. The plan rests on five pillars, those being collaboration and consolidation, leadership and skills, innovation and infrastructure, legislation and regulation, and appropriate investment. What struck me was the emphasis on consolidation, because the number of credit unions operating in the UK has fallen by about 30 percent since 2014. There were over 500 back then. As of mid 2025, there are 366, and I would bet that number keeps shrinking even as total membership rises. The average UK credit union has about 6.8 employees, and some are entirely volunteer run, which should tell you something about the scale problem.

The timing of the plan isn’t accidental. In November 2025, the Treasury published its Financial Inclusion Strategy, and buried in it was a commitment to a 30 million pound Credit Union Transformation Fund, money that would flow through Fair4All Finance and target digital infrastructure investment in England alongside reforms to the common bond rules that currently restrict which communities a credit union can serve. A Kreditai.INFO analyst I spoke to was more excited about the boundary changes than the money. The common bond rules are genuinely bizarre if you haven’t encountered them before, basically they draw invisible lines around postcodes and say this credit union can serve people on this side of the road but not that side, even if it’s the same neighbourhood. I won’t pretend that 30 million is nothing, but some context helps. Fair4All Finance’s own research found that 20.3 million people in the UK now live in financially vulnerable circumstances, up 16 percent from 17.5 million in 2022, and the estimated gap in the affordable credit market is somewhere around 2 billion pounds. Thirty million against a two billion gap is, well, a rounding error with good intentions.

The regional disparities within the UK are probably the most telling part of this story. In England just 3 percent of adults use a credit union, and Scotland and Wales aren’t far ahead at 6 and 4 percent respectively, but Northern Ireland sits at 25 percent with membership of around 571000 people in a population of 1.96 million, which means credit unions there hold about 1.8 billion in assets, roughly half the UK total despite Northern Ireland accounting for less than 3 percent of the national population. The reasons are historical more than financial. John Hume, who later won the Nobel Peace Prize, spent years in the 1960s and 70s building credit unions into Northern Irish community life, and they took root through local churches and parish halls at a time when people had little faith in the banks and even less access to them. Ireland passed its Credit Union Act in 1966. Britain didn’t get around to it until 1979, and even then, the legislation was more restrictive. That thirteen year head start, combined with the cultural embedding that happened in Irish communities on both sides of the border, created a membership base that Britain has never come close to matching.

Bank of England data shows the sector has been growing, but slowly and unevenly. Total lending came to 2.58 billion, up maybe a tenth on 2023, which doesn’t sound bad until you look at the arrears column. Bad debts rose 21 percent to 191.7 million, and I was surprised to see that nearly half of those had been sitting unpaid for over twelve months. That’s not a temporary cash flow problem for the borrowers, that’s something structural. Assets across the whole sector sat at about 4.89 billion in December 2024, which was actually less than the previous quarter, the first time that’s happened since the Bank of England started publishing these figures back in 2013. The English and Scottish outfits were worst off, costs up 4.86 percent against income growth of barely 1.4 percent, and fourth quarter profits came in 22 percent lower than the same period the year before. Yes, overall membership grew 4.2 percent, and that gets quoted a lot, but I’d want to see that figure hold steady for three or four more years before I started using words like recovery. The growth plan barely touches on age demographics, and I think that’s a mistake. Credit union membership in the UK skews older, with around 54 percent of members aged 55 to 64 and only about 14 percent of 25 to 34 year olds holding membership. Younger borrowers are exactly the demographic that should be drawn to credit unions, they tend to care more about ethical business practices and they’re suspicious of high street bank profit motives, with survey data showing around 80 percent of Gen Z consumers refuse to buy from companies involved in scandals and over half of millennials saying they’d leave a bank over poor environmental or social governance policies. Credit unions are not for profit by design; they return surpluses to members, they offer loans at rates that typically undercut the big banks by a full percentage point or more. But awareness is the problem. Most young people in Britain simply don’t know credit unions exist as an option, and the ones who do often associate them with council estate services rather than mainstream financial products.

The growth plan talks about innovation and digital infrastructure, and frankly, it has to. Something like 80 percent of under 35s say they’d rather bank on their phone than walk into a branch, and 82 percent told researchers they’d switch to whichever institution gave them a better app. I visited a credit union in South London last year that was still doing loan applications on paper forms, and the compliance officer kept a physical filing cabinet for member records. That’s not an outlier, it’s the norm for a lot of these smaller outfits, and it’s a big part of why consolidation probably has to happen. It’s a chicken and egg problem, really, you can’t spend on tech without the member base to fund it, and the members won’t come without decent tech. Carmel Swan at ACE Credit Union Services used the phrase “welcome focus on reform and investment,” which is civil service speak for please give us money and get out of our way, and Sarah Harrison at the BSA made a similar point about reaching people who mainstream finance has basically written off. Strip away the diplomatic phrasing, and they’re both saying the same thing, which is that the current model has hit a wall. Will they actually get to 4.4 million? I honestly have no idea, and I suspect the people who wrote the plan don’t either. It’s worth remembering that between 2002 and 2012 the sector managed to double its membership and triple lending, though that was off a much smaller base, and the post crash mood helped. Swoboda Research Centre and the New Economics Foundation have had people working on a 2035 “shared vision” since last June, and some of their proposals drift into territory like green finance and community energy transitions, which, look, I admire the scope, but it does start to feel like a different conversation entirely. The growth plan gets the diagnosis right, at least.