Community credit unions and payroll deduction: a report on a field trial

Representatives from credit unions, universities, Carnegie UK Trust, the Scottish Government, Glasgow City Council, the Ethical Finance Hub and others, met last week at the City Chambers for the launch of a new report on the opportunities and challenges facing community credit unions in initiating payroll deduction schemes.

The report, Credit Unions and Payroll Deduction published on International Credit Union Day (20 October 2016) is based on work by  academics Dr Kathryn Waite and Dr Robbie Mochrie, as part of a SUII follow up programme, in collaboration with the Chartered Institute of Payroll Professionals and two community credit unions based in Glasgow – Drumchapel Credit Union and Greater Govan Credit Union.

Councillor George Redmond, from Glasgow City Council, who opened the event, highlighted the continued support for the credit union sector in Glasgow, noting that around 25 percent of Glaswegians currently belong to a credit union.

The Scottish Government has also shown its commitment to the growth of credit unions with the establishment of a credit union working group in 2014, chaired by Fergus Ewing MSP. Key themes from the working group report, Scotland’s Credit Unions: Investing in Our Future, were presented by Kenneth Pentland, Policy Officer, Scottish Government.

Dr Robbie Mochrie noted:

Payroll deduction helps employees to save regularly from their wages and gives access to low-cost loans. Through partnership with credit unions, and by offering payroll deduction, employers can demonstrate their commitment to employee financial wellbeing, and it’s widely accepted that payroll deduction is a low-cost workplace benefit that can assist with employee recruitment and retention.

This project has brought together external stakeholders and credit unions in a collaboration that clarifies some of the steps that community credit unions need to take in order to make widespread use of payroll deduction agreements. Key recommendations are that:

  • the Scottish Government publicises its inclusion of payroll deduction as an element of the Scottish Business Pledge,
  • the Scottish Government and local authorities work together to develop a payroll deduction standard for community credit unions,
  • the Scottish Government and local authorities and their associated agencies should enable approved credit unions to form flagship relationships with public service organisations,
  • Glasgow City Council works with approved credit unions to establish a co-operative payroll deduction development unit,
  • all agencies working with credit unions review their support for payroll deduction development, recognising the potential advantages of community credit unions mobilising their members as payroll deduction advocates; and
  • materials promoting payroll deduction should explicitly recognise the context in which community credit unions operate, and guide credit unions and employers through the whole of the relationship formation process.
    Images with thanks to Guy Hinks

Further reading

Community Credit Unions and Payroll Deduction Report
Scotland’s Credit Unions: Investing in our future – Scottish Government
Gateway to Affordable Credit – Carnegie UK Trust
Building sustainable credit unions – Robbie Mochrie, Kathy Waite, Tina Harrison, Alasdair Rutherford



Author: scotinsight

The Scottish Universities Insight Institute supports programmes of knowledge exchange which address and provide insight on substantial issues that face Scotland and the wider world. Our programmes break down disciplinary and organisational barriers in bringing together academics from different backgrounds, policymakers and practitioners to mobilise existing knowledge in fresh ways through sustained and collaborative focus on a shared issue. Our member universities are: Aberdeen, Dundee, Heriot Watt, St Andrews, Strathclyde, and Glasgow School of Art.

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