Credit unions deliver vital financial services to millions across Britain – whether its loans or savings accounts. They have helped to change the lives of people and families across the country for the better. Now they are at the heart of the Government’s newly launched Financial Inclusion Strategy.

As a result of financial exclusion, people and households can experience significant insecurity and precarity in their lives. This can leave people trapped in poverty – and in the worst instances homeless. That’s why building financial inclusion is so important to increasing living standards, reducing poverty and reducing homelessness across the UK.

The new Financial Inclusion Strategy seeks to build financial inclusion across all generations – helping ensure everyone can access and manage their finances effectively. New plans will improve access to banking – ensuring people can build up savings and access finance in their locality – regardless of where they live. Digital inclusion will be strengthened, helping those who struggle with the transition to the increasingly digital financial world. Action will also be taken to prevent people developing debt problems – which leave them vulnerable to loan sharks and predatory lenders.

The Government’s new plans will see the credit union sector taking a leading role in meeting the challenge of financial inclusion and access to affordable credit. The sector will be able to modernise to meet member’s needs through a new investment of £30m in a Credit Union Transformation Fund. This will help to ensure credit unions can cater to younger member’s needs, with greater technological development and new products. This will be funding from dormant assets deployed by Fair4All Finance.

Accompanying this new Credit Union Transformation Fund will be an ambitious package of reforms to the credit union common bond – a reform the Co-operative Party have long campaigned for. The common bond is a requirement that credit union members share a specific connection – such as living in a certain area, working at the same employer or sharing the same profession. The new changes will open the locality bond cap – so they can expand and grow in large urban areas like London. Eligibility requirements will be broadened for non-qualifying members and new legal clarity will be established on changes credit unions can make to their common bond.

The Financial Inclusion Strategy marks a new era for credit union growth in delivering for families and communities up and down the country. It’s a significant recognition of the transformative impact financial mutuals can have on lives and will be a big boost to creating a fairer, more inclusive economy.