THREE years ago Helen Eatwell was around £10,000 in debt.

She had borrowed cash from payday loan companies, owed money to catalogues and was running up charges with her bank from defaulting on direct debits and standing orders.

The single mother of two was dependent on benefits and was taking out loan after loan to pay for basics for her children, because the interest payments and charges she was facing were eating up so much of her money.

Then she heard about the Hampshire Credit Union (HCU) and everything changed.

She became a member and took out an account with them in October 2009. They helped her to manage her debts and begin to save money – she hopes to be completely debt-free by April.

They also took her on as a volunteer, in return training her for an NVQ in business and administration. She has since gone on to complete her levels two and three and found work with Sentinel Housing Association.

She admits that she can hardly believe how much the credit union has changed her life.

“I’m quite chuffed now,” she says. “I’m not wondering if the door is going to go and it’s going to be a bailiff. We are now able to live, not just scrape by. We don’t have loads of money, but we’ve got a little bit so we can manage a treat like a take away or a day out without having to worry.

It’s worked out well.”

Helen is just one of thousands of people who have been helped by HCU, also known as United Savings and Loans, to break the cycle of debt. And the people who run HCU would like to help thousands more like her – but find that most people just don’t know what a credit union is.

In many ways, credit unions function like banks, offering loans and bank accounts. The main difference is that they do not have external shareholders and are instead run for and by members as a notfor- profit organisation.

Hampshire Credit Union was established in Portsmouth in 2001 and now has outlets throughout Hampshire and the Isle of Wight.

They provide savings accounts, affordable loans and current accounts for all members, and pride themselves on presenting a friendly face, reaching out to the community and lending a helping hand. Credit unions are mostly set up on a community basis, with the whole ethos being keeping money local,” says Alistair Webb, project officer at the HCU, adding that it is fully regulated by the Financial Services Authority.

“The only stakeholders are our members. That means that when the organisation makes money, that’s returned to our members through dividends on their savings accounts. If you borrow from us, that money is staying local. You’re not giving it away to a big multinational company, which is then sorting out its own shareholders.”

Alistair hopes that more and more people will come to the HCU for their loans and bank accounts rather than to payday loan companies and banks that may have hidden charges.

Sam Wilkes-Holmes, who started with HCU as an apprentice and is now an office supervisor, says that many people get into worse financial problems because they sign up for loans, accounts and products without fully understanding them. “For example, if people miss a payment on a payday loan they can find that the next time there is money in their account the whole sum is removed,” he says.

“I’ve seen £600 be taken out in one day. Subscriptions are another example – people sign up to something for free then don’t cancel in time and have to pay for it.”

HCU offers its customers loans at attractive rates.

Alistair explains: “Borrowing £500 over 12 months from HCU would cost the member £563. Using a doorstep loan agent, the same loan would cost £910 – so for every £100,000 borrowed from doorstep lenders, £70,000 is sucked out of the community.

“The more people use these companies, the more money is sucked out of the area. We like to think that if you’re keeping your money local, you might be spending local as well.”

Although loans are an important part of what HCU does, around half their members have bank accounts. Alistair admits that there is a perception problem with credit unions – when people do know what they are, they tend to think of them as a “poor man’s bank”.

But he says that’s far from the case, with HCU offering a range of accounts, including savings schemes and a “jam jar” account, which helps people to budget their spending for different areas.

They think this will be particularly important when Universal Credit is introduced for benefit claimants, which will see a single benefit paid to the recipient on a monthly basis, rather than the current situation of fortnightly payments with council rents being paid directly.

“You’ve got people who have been receiving £120 a fortnight and they’re going to have £800 at once, so the temptation for some people will be to be reckless with it,” says Sam.

HCU doesn’t have the money for advertising campaigns and says that the people who would most benefit from their services are often the hardest to reach. The vast majority of their customers come through word of mouth, with many referred on by agencies such as housing associations.

They want to get the word out to more people across the county that whatever their financial situation, the HCU is there for them.

With many people still feeling wary of the big banks, perhaps the time for small, local credit unions is here.

n Hampshire Credit Union has offices in Southampton, Fareham, Winchester, Newport, Portsmouth, Andover and Basingstoke. For more information about Hampshire Credit Union, visit or call 023 9282 7980.