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Frequently asked questions

How does the PCS credit union work? Your questions answered

What is it?

A financial co-operative, owned and run by its members, offering convenient savings products and low cost loans.

Credit unions are regulated by the Financial Services Authority (FSA) and operate within a statutory framework.

Legally, the members of a credit union must have something that joins them together – the ‘common bond’ – ours is membership of PCS. Only members, associate members or life members (and their spouses, partners or children) of PCS are eligible to join.

Who can join?

All members of PCS including:

  • Ordinary members
  • Associate & Retired members (includes PCS Staff & full-time Officers)
  • Life members

and their immediate family/partners provided they live in the same household.

Who runs it?

PCS members. Ultimate responsibility for the credit union’s statutory, legal and moral obligations rests with a board of directors, who are all members of the credit union and are directly elected at the annual general meeting.

Any member can stand for election and if they are successful, full training will be given. The board ensures the integrity and security of members’ assets. A small team of staff take care of the day-to-day operational management, so we can be sure of offering a professional service with people constantly available to help.

What am I committing to by joining?

Every member is committing to save regularly, with a minimum payment of £10 per month. Every £1 buys a share in the credit union and every member has sole ownership of their shares.

Will my identity be verified?
Yes, PCS Credit Union will use electronic checks to verify your identity.  If we cannot verify your identity electronically, we will ask you to provide appropriate paper documentation instead.  These checks are performed because the Financial Services Authority (FSA) expects all credit unions to have robust policies and procedures in order to comply with Money Laundering Regulations and other law, as well as ensuring that members meet the common bond criteria. Although we check your details on the PCS membership database to verify you meet the membership criteria, this would not be sufficient as an identity check, as no such checks are performed by PCS trade union and information held on members may also not be current.  Similarly, we do not have access to any information that is held on you by your employer.  

Do members receive interest on money invested?

Money invested by members buys shares in the credit union. Once running costs have been met, any remaining surplus can be paid to the members in the form of a dividend. Recommendations about whether a dividend can be paid by PCS credit union and how much it might be will be made by the Board of Directors to the annual general meeting of all credit union members.  It is anticipated that any potential dividend payments in early years will be limited to allow increases in credit union reserves.

How do I apply for a loan?

After members have saved for 3 months, they will be eligible to apply for a loan. The board agree the detailed loans policy and we will ensure members are kept informed of it.

The amount of money that can be borrowed and the repayment terms will depend upon the period and value of savings, the purpose of the loan, amount requested and the character of the member. We will be able to provide smaller loans of up to a few hundred pounds, but many credit unions also usually have loans of up to £7,500 available.

The officers will decide the rate of interest, but the maximum any credit union charges is 2% per month (APR26.8%) on the reducing balance. Many charge 1% per month (APR 12.68%) which means that, for example, a loan of £1000 repaid over a year would cost only £67 in interest.

All loans will be protected by life insurance with premiums paid by the credit union. This means that dependants will not inherit debts.

Details of the current policy and loan application forms can be obtained from the project office.

How will I manage my account?

Payments for your monthly savings will be collected by direct debit from your bank account on the 1st, 9th or 18th of each month as specified by you. You will be able to vary this amount, deposit a lump sum or make a withdrawal by contacting the credit union office.

Any loan or withdrawal would be paid directly into your bank account and you would also make your loan repayments by direct debit.

It is anticipated that members will be able to manage their accounts online in the future.

What happens to my money?

The credit union uses it to provide preferential rate loans to members who need to borrow or places it in secure investments of low risk. Interest is earned on it for the credit union. The income we generate from lending helps us to meet our operating expenses, build our reserves and pay savers a dividend on their shares (once the reserves have reached a sufficient level and running costs have been met).

Is my money 100% secure?

Yes. We are regulated by the FSA and contribute to the Financial Services Compensation Scheme so that your savings are fully protected. The PCS credit union has a supervisory committee which ensures that the credit union is acting in the best interest of its members.

We take out insurance, at no cost to you, to protect your money in the
event of fraud or dishonesty and the board may also decide to offer free insurance on savings and loans in the event of a member’s death.

If I leave PCS can I continue with the credit union?

By law a credit union is allowed to have no more than 10% of its members who are ‘non qualifying’, in other words when they joined they were members of PCS but ceased to be so at a later stage.

Therefore if a person joins the credit union when they are a member of PCS and they then cease to be a member of it they can still remain a member of the credit union. It is in the rules of the credit union that when a member of the credit union leaves the membership of PCS they must report the situation to the credit union management.

However, if they cease to be a civil servant or PCS member because of some wrong doing of the trade union member for example, then they cannot continue being a member of the credit union.

What happens if I want to leave the credit union?

You will need to give written notice of your wish to leave the credit union; the amount of notice time required will be decided by the board of directors, but it is likely it will be about one month's notice. You can only leave the credit union if you do not have outstanding loan repayments.

Where’s the small print?

There isn’t any. But if you would like more details on how the credit union will work and savings and loans, information is available from the project office.

Who do I contact for more information?

For more information please contact:

Alaine Perrott
PCS credit union office manager
PCS credit union Ltd
Douglas Houghton House
231 Vauxhall Bridge road
London
SW1V 1EH