northern_david, Author at Northern Community Bank

Our Terms & Conditions Have Been Updated

March 4, 2026 1:55 pm Leave a Comment

At Northern Community Bank, we like to keep things clear, fair and easy to understand. That’s why we’ve recently updated our Terms and Conditions (T&Cs) to make sure they’re up to date, in line with our rebrand, and written in a way that’s straightforward for everyone.

We review our T&Cs from time to time to reflect changes in the services we offer and to make them as clear as possible for our account holders. This latest update includes:

Simpler language – we’ve cut down jargon and made the wording easier to follow.
A fresh look – the layout and design have been refreshed, making them easier to read.
Small wording changes – such as replacing longer sentences with shorter, clearer ones.

We’ve also made some specific updates, which are available in detail on the PDF found here.

Point 2 – Added legal section for good practice
Point 4.2 – Updated for clarity
Point 4.4 – Updated for clarity
Point 4.6 – Updated to reflect increase in Financial Services Compensation Scheme protection increase
Point 4.8 – Updated for clarity
Point 5.1 – Updated for simpler language
Point 5.4 – Updated for clarity
Point 5.8 – Updated for clarity
Point 5.9 – Added to help account holders find historical share of the profit rates
Point 6.4 – Updated for clarity
Point 7.1 – Updated for simpler language
Point 8.1 – Added for clarity
Point 8.2 – Updated for clarity
Point 8.4 – Updated for clarity
Point 8.6 – Updated for clarity
Point 8.7 – Updated inline with improvements to the Young Savers account
Point 8.8 – Updated inline with increase to maximum amount allowed in Fixed Term Savings
Point 8.9 – Added to help account holders find historical Northern Saver rates
Point 8.9 – Final bullet added for clarity on regulatory criteria on interest-bearing savings from Credit Unions Act 1979
Point 9.2 – Updated for clarity
Point 9.3 – Updated for clarity
Point 11.2 – Added to support account holders locate statements on closed accounts
Points 12.1, 12.2, 12.3, 12.4 – Clarity on transactions and Payments
Point 13.1 – Updated to reflect increase in Financial Services Compensation Scheme protection increase
Point 17.1 – Updated for clarity
Point 20 – Added for the introduction of the Bereavement Fund
Point 21.2 – Updated for clarity
Point 22.1 – Updated for clarity
Point 23.3 – Tables updated to highlight the decreasing of restrictions on Online/App withdrawals
Point 23 – Added due to partnership with OnePay
Point 25.1 – Clarity on loan repayment method options
Point 26.1 – Added to clarify process when arranging transfer of Child Benefit for Family Loan
Point 26.1 – Point removed as applicable to all loan repayments
Point 27.4 – Added to clarify Payroll Plus Loan application eligibility
Point 35.3 – Removed due to repetition with Point 36
Point 35.4 – Clarification on consequences of loan payment issues
Point 36 – Merged points 35.3 and 36 for clarity

You can read the updated Terms and Conditions in full here:

We’re committed to making sure our account holders know exactly where they stand, without having to wade through complicated language. This is just one of the ways we’re making money easier for everyone.

A week in the life of – The Development Officer

February 11, 2026 3:20 pm Leave a Comment

We followed Northern Community Bank’s Development Officer, Lee, for a week to find out how the community bank works with organisations across the region to build a stronger community.

Monday

Lee started the week with a regular appearance at Down Town, Burnley, who offer a variety of services for the community, providing free information, support and guidance across Burnley and Padiham

“I’ve always been impressed by the team here, who are genuine, caring and provide a relaxed and helping environment for all walks of life.”

In the evening Lee was invited as a guest speaker for the Rotary Club of Burnley and Pendleside. The Rotary club is over 40 years old and operates as a service organisation that fundraises to support local charities and community projects including the well-established Pendle Pub Walk

“I had the opportunity to talk about how Northern Community Bank supports all members of the community, discussed the synergy where both organisations operate purely to benefit other people and finished with a Q & A. I look forward to supporting their events in the future.”

Tuesday

The morning started with an invitation to speak to more than 50 local residents at Trawden Community Centre’s Friendship Group & Friendship Café

“A great crowd, bursting with knowledge and experience – where I highlighted how we could help not just the attendees in the room – but friends and family of all ages”

In the afternoon Lee reached out to community centres across Cumbria and Lancashire which he had visited in the past 12 months to discuss an exciting project for 2026

“It was great to find out about the ways the volunteer-run community centres are a life-line to many in the community, although we’re not ready to announce the project just yet -I cannot wait for us to help them support more people in 2026”

Wednesday

A busy day ahead. Invited to the Advocacy Focus team meeting at their branch in Burnley

“It was interesting to hear how the team at Advocacy Focus provided independent statutory advocacy, largely for people in crisis or for people who felt that their voice wasn’t being heard. Their ethos aligns with ours at Northern Community Bank; they’re driven to make a positive impact on the lives of people in the community. We talked about signposting and co-promoting”

After lunch Lee took the opportunity to host a stand at the East Lancashire Chamber of Commerce’s renowned Rush Hour networking event, held at the Crow Wood Hotel, Burnley, to promote the benefits of Northern Community Bank’s free Payroll Plus scheme, designed to help employees of companies we partner with manage their money better

“It was a well-attended event, where I engaged with business leaders from across the region”

Development Officer Lee Chamber of Trade Rush House 2026

We’ve worked with several employers for many years, with new organisations seeing the value in supporting their employees through our accounts and financial education.

Thursday

In the morning Lee visited the Whitehaven Family Hub, Cumbria, to see Family Hub Team manager, Jess Stamper. Family Hubs provide a single place to go for face-to-face support and information. Services will vary for children from 0-19 years old, but at the heart of all family hubs are services for families with 0–2-year-olds, which give babies a great start in life

“Jess is responsible for five of the Hubs in Cumberland and we spoke about a variety of ways to work together to help people in the community including organising family funday events during the summer holidays and a regular monthly drop-in session incorporating other external partners.”

In the afternoon Lee visited St. Bridgets, Bransty, Moresby, St. James and Jericho Primary schools to deliver the Money Suitcases Financial Education project. The money suitcase is red (budget case!) and contains an age-appropriate book all about financial education, written by TV’s Dragon’s Den star, Deborah Meaden, a cuddly toy squirrel called Sammy (as we all need to squirrel pennies away!), an easy to understand explanation sheet, a book for the children to record what they have learnt and some delicious chocolate coins! The concept has been applauded as it is a great way of helping young people understand money, budgeting and wants and needs.

Friday

Visited another five Primary schools; Hesingham, Valley, St.Mary’s, Monkwray and St.Begh’s where the teachers explained that many pupils had little knowledge or understanding of money and the Suitcase project should help fill a gap in their financial education.

Overall, a productive and varied week in the world of a Development Officer and one that demonstrates our commitment to all areas of the community that Northern Community Bank serves.

Our Privacy Notice Have Been Updated

January 30, 2026 1:59 pm Leave a Comment

At Northern Community Bank, we like to keep things clear, fair and easy to understand. That’s why we’ve recently updated our Privacy Notice to make sure that it is up to date.

We’ve also made some specific updates, which are available in detail on the PDF found here:

Who Are We section – Added for good practice
The Personal Data We Collect section – Added to detail specific information collect
Lawful Basis for Processing section – Added to detail of purpose and lawful basis to process
Where We Obtain Personal Information section – Expanded list of places we obtain personal information from
Transferring Information Outside the UK section – removed unnecessary example
Retaining Your Information section – table added to detail type of data, retention period and reason for retaining information
Your Rights section -clarification on right to erase

You can read the updated Privacy Notice in full here:

The Bereavement Fund for your savings and loan

January 21, 2026 12:18 pm Leave a Comment

What would happen to your savings and loan if you die?

Not only does choosing to borrow and save with Northern Community Bank support your local communities, it also means your loved ones are supported should you die, through our Bereavement Fund on both savings accounts and loans at Northern Community Bank.

This is a huge benefit for our account holders and their families as this support is not something offered widely by other financial institutions, especially at no extra cost.

As an ethical lender the purpose of offering this support is because it enables a better financial future for our account holder’s families. As at a tough time, a lump sum of money can help minimise the financial impact that your death could have on your loved ones.

What will happen to my savings?

Through the Bereavement Fund, savings may be doubled up to a maximum of £5,000 across Northern Community Bank savings accounts, where funds were deposited between birth and the age of 65, and 25% for funds deposited between the ages of 65 and 80.

With the introduction of the Bereavement Fund, additional support is provided for account holders with savings balance below £250, where savings are deposited up to the age of 65, the balance may be topped up to £500. The Bereavement Fund payment will be calculated from eligible saving account balances, held 6 months prior to death.

Meaning in the event of your death your savings balance and an additional Bereavement Fund payment will be paid to the person who is named as beneficiary of your account.

It’s extremely important your beneficiary details are kept up to date, the best way to do this is by emailing us at hello@northerncb.uk or by messaging us on our app.

This means you are not only saving for your own future, but also for that of your family. With the added benefit of savings support through the Bereavement Fund, your nest egg could help towards funeral costs or could be left as a legacy for your loved ones in the event of your death. To open a Northern Community Bank savings account today – Click here.

What will happen to my loan?

If you were to die before your Northern Community Bank loan is repaid, the Bereavement Fund may also be used to repay an outstanding loan balance.

Meaning where account holders meet the Bereavement Fund’s eligibility criteria, the full loan balance will be repaid, so that it is not passed on to your loved ones.

Needless to say it will not take away the pain but it will certainly help reduce the potential financial strain of bereavement. This benefit is included at no extra cost to you as part of the Community Bank loan arrangement, so just for once, peace of mind does not cost the earth; it is just another benefit of being a Northern Community Bank account holder and choosing to borrow responsibly. If you would like to apply for a Northern Community Bank loan today – Click here.

Examples where account holders meet the Bereavement Fund’s eligibility criteria

Mrs A, age 60 is a Northern Community Bank account holder. 6 months prior to her death, she had £20 in savings, and no loan. Mrs A’s beneficiary may receive £500, the minimum pay out amount.
Mr B, age 64 is a Northern Community Bank account holder. 6 months prior to his death, he had £800 in savings and a £3,000 loan. Mr B’s beneficiary may receive £1,600 (£800 savings, doubled) and the Bereavement Fund may also repay the loan.
Mr C, age 64 is a Northern Community Bank account holder. 6 months prior to his death, he had £20,000 in savings and a £6,000 loan. Mr C’s beneficiary may receive £5,000; the £20,000 savings will be part of Mr C’s estate and The Bereavement Fund may also repay the loan.
Mr D, age 75 is a Northern Community Bank account holder. 6 months prior to his death, he had £20,000 in savings deposited before the age of 65 and a £6,000 loan. Mr D’s beneficiary may receive £5,000; the £20,000 savings will be part of Mr D’s estate and The Bereavement Fund may also repay the loan.

More examples can be found in the Terms & Conditions.

Northern Community Bank remains committed to supporting its account holders and their families during difficult times. The Bereavement Fund is a discretionary fund and is not an insurance product. Of course, this excellent support is subject to terms and conditions which can be found here. If you do require any additional information about the Bereavement Fund please contact a member of staff.

Full terms & conditions here

It’s extremely important your beneficiary details are kept up to date, the best way to do this is by emailing us at hello@northerncb.uk or by messaging us on our app.

Remembering Debbie Maher

December 18, 2025 9:12 pm Leave a Comment

With great sadness we say goodbye to founder member, former Board member, long-term colleague and friend.

All the team at Northern Community Bank are very sad to hear of the passing of Debbie Maher. On April 23rd 1982, Debbie was part of a Saver Group which launched, and would eventually become Northern Community Bank, with just 15 account holders, where the first collection produced a total of £75 in savings.

Since that day Debbie has been a constant, dedicated and loyal part of our development. Firstly as a volunteer Board Member and Vice-Treasurer at St John Southworth Church, on Vaughan Street in Nelson and then at the opening of our first town centre collection point at Christ Church in 2004. She became a member of our staff team in 2009 when we opened the first branch we purchased on Nelson’s Manchester Road.

Debbie will be fondly remembered by account holders at the Shackleton Hall branch in Colne, which she managed as we grew into the fabric of the Colne community. Less known, behind the scenes Debbie and her team managed the first online account area we introduced to account holders in 2016.

Throughout every stage of our growth, Debbie played an integral role, right up to the present‑day Northern Community Bank, supporting communities across Lancashire and Cumbria.

Whether you visited one of our branches or managed your account from afar, Debbie’s influence will have had a positive impact on your experience with us.

As part of the team, Debbie’s knowledge and experience was invaluable but more than a colleague, Debbie was a friend who will be deeply and sincerely missed.

Good news: your money’s now FSCS-protected up to £120,000

December 10, 2025 11:49 pm Leave a Comment

On the 1^st December 2025, the Financial Services Compensation Scheme’s (FSCS) protection limit for eligible cash deposits with UK banks, building societies, community banks and credit unions increased from £85,000 to £120,000. This means your cash deposits are now protected up to the value of £120,000 with Northern Community Bank.

FSCS protection applies to cash deposits you hold with a UK-authorised financial firm and it’s a limit that applies per person, per firm. So, if you have cash deposits in multiple accounts with the same firm, you will be protected up to £120,000 across those accounts if that firm were to fail.

There’s nothing you need to do – the limit has automatically been updated for you.

You can learn more about the FSCS on this dedicated page.

Account limit Increases

Following the FSCS protection limit increase, Northern Community Bank has also increased the total amount of combined cash you can hold across the following accounts from £85,000 to £120,000:

Long term savings
Fixed Term Savings earning up to 4.5% AER
Northern Saver 2.78% AER (variable)
Instant Access
Christmas Savings
Bill Planning
Dream Saver
Young Saver
Save the Change

It’s a great reason to consider moving more of your savings to Northern Community Bank, to make the most of our savings accounts and competitive interest rates.

Check out the different savings accounts we offer here

There has been no change to the interest rate you are currently earning with your Northern Community Bank savings accounts.

We’re updating our T&Cs

To reflect the new FSCS limit, we’re updating our terms and conditions. You can view them anytime on our website here. If you have a question about the FSCS protection you can speak to our team through the Online Account Area and secure App chat or email hello@northerncb.uk or telephone 01282 691 333.

Northern Community Bank is here!

July 24, 2025 8:13 am Leave a Comment

Today marks a brand new chapter and we couldn’t be more excited to share it with you.

We’re proud to announce that we’re now officially Northern Community Bank.

It’s more than just a name change it’s a reflection of who we’ve become and the communities we’re here to serve.

Over the years, we’ve grown beyond the ‘Pennine’ patch, welcoming thousands of account holders from across Lancashire and Cumbria from Preston to Penrith, Pendle to Lancaster. So, it felt like the right time to choose a name that speaks for all of us, wherever in the North you call home.

“We are excited to introduce Northern Community Bank. After we expanded our services across Lancashire and into Cumbria, we understood we needed to be more inclusive to all the communities we serve. We look forward to welcoming more account holders from across the North with the same friendly service we have provided since 1982.”

— Kathryn Fogg, CEO

We’ve also stepped away from using ‘credit union’ in our name. Why? Because we want to make things as simple and clear as possible. We never want anyone to feel unsure about what we offer or who we’re here for – we’re here for everyone.

The name may be new, but the heart of who we are hasn’t changed one bit.

We started as Nelson Community Credit Union more than 40 years ago with one mission, to help people take control of their money. That’s still what drives us, every single day.

“We’ve been on an amazing growth journey to serve 17,000 people across the North. To be trusted to look after £21 million in assets on behalf of the community is brilliant. Last year we welcomed 1,800 new account holders, with 97% telling us they were happy with the service the Northern Community Bank chapter of our story will continue to put people at the heart of everything we do and help even more people.”

— Gerard Spain, President

And there’s more to come. We’re already working on new ways to help you save, borrow and manage your money more easily. Because we’re not just a community bank in name — we’re built around what matters to you.

No hidden fees. No complicated processes. Just simple, fair financial services that put people first.

At the launch of the new brand, Chief Operating Officer Tia Warbrick outlined where we’re heading in 2025 with a strong focus on helping more people grow their savings. Recent figures show there’s an estimated £280 billion sitting in UK accounts earning no interest, and we believe communities across the North deserve better. That’s why we’ll continue improving our services to help make every pound work harder.

“We will continue to improve the services for the community, whilst aiming to repeat the £1.1m share of profits we returned to account holders in 2025. We have released a competitive 4.5% 1 year Fixed Term account and new interest-bearing savings account to encourage regular saving, concentrated effort into young savers, whilst continuing to improve the ‘Money Matters’ education suite and made it easier to access affordable lending. Our purpose is to make managing money easier for everyone.”

— Tia Warbrick, Chief Operating Officer

That’s already happening. In our 2025 survey, 98% of account holders said it was easy to manage their money using our app, online account area, telephone banking or in-branch services. But we’re not stopping there, we’re committed to growing the support we offer across the North.

Because money should work for everyone – not just the few.

“Our mission has always been to put people first. As Northern Community Bank, we’re doubling down on that promise – making community banking straightforward, fair, and tailored to each individual’s needs. This name change is about breaking down barriers and opening doors for everyone in our community.”

— Kathryn Fogg, CEO

You don’t need to do anything, your account stays exactly the same, and we’ll continue delivering the high level of service you know and trust.

We’re still owned by you, still not-for-profit, and still here to make managing money simpler, fairer, and more accessible for our communities.

Welcome to Northern Community Bank – we’re just getting started.

Staff outside the new Northern Community Bank in Colne

Savvy saving tips

March 3, 2025 3:37 pm Leave a Comment

For four decades Northern Community Bank has been dedicated to helping account holders create better saving habits. So much so that Pennine is now trusted with over £16.5m of account holders money.

If you are someone who would like to build some extra savings here are 10 money saving tips that will help you get started.

Budget– decide on a manageable saving amount through budgeting your outgoings in relation to your income.
Set a target – in mind of the amount of total money you would like to save in a certain timeframe and its purpose. Having this in mind can really help you to be consistent with your savings habits. You can use the free savings calculator on our website here .
Prioritise your savings account – As soon as you receive your income for the week/ month, set aside your manageable savings amount from your usual current account. This can be done automatically through a standing order or manually.
Think before you buy – we understand that it can be difficult not to buy unneeded items once payday hits. Therefore we recommend before each purchase waiting at least 24 hours before buying. This can help you really think about if you need this item or not.
Watch your bank balance – keeping a close eye on your bank account can help you become more aware of your finances. Better yet identifying your largest regular outgoings can help you cut back on your spending in this areas.
Rehome unwanted items – Take use of the extra time at home to sort through your cupboards and sell items online that you no longer have a use for.
Fakeaways – Tackle recreating your favourite takeaways at home. It will likely be not only cheaper but healthier too.
Upcycle existing furniture before buying new – This could save you hundreds of pounds when redecorating. There’s lots of free online resources that will show you how too.
Save what you would usually spend – each time you don’t follow your usual spending habits transfer this money into a savings account e.g. if you would usually save £50 on a family takeaway at the weekend and only spend £20 on a homemade alternative put £30 into your savings account.
Lastly, reward yourself – each time you hit a significant figure with your savings treat yourself to something you really want. Saving can be hard and sometimes restrictive, allowing yourself a reward for your efforts is likely to encourage you to keep going.

We hope these saving tips will help you recognise where you can improve on your saving habits and enable you to build a healthy saving pot that you can fall back on it you need to. Why not put these tips in to action today and build a better financial future for tomorrow.

If you are looking for a savings account then Northern Community Bank have a range of different accounts designed for all our account holder’s needs such as a long term saving account, instant access savings, a Christmas savings account and a young saver account for your little ones. If you do choose to save with us you will also be helping people within your local community too! As while the money you save is safe within your account (protected by the FSCS up to £120,000) it allows us to issue loans at affordable rates.

If you wish to learn more about which free account is the best for you, call our knowledgeable team on 01282 691333.

Doorstep Lender Morses Club Stops Lending Money

November 22, 2023 11:11 am Leave a Comment

Biggest dootstep lender in the UK Morses Club goes into administration

Morses Club has stopped lending after 130 years. Once Provident exited the doorstep lending market in in 2021, Morses Club was the largest doorstep lender in the UK. As with any business failure our thoughts are with the 350+ employees that work for Morses Club as they enter into administration however we will not miss a company charging people in our community an eye-watering 343% APR on loans.

We know many people in our community were part of the 140,000 customers that Morses Club provided loans to over the last year and we urge anybody who finds themselves needing borrow this Christmas or into the New Year to contact Northern Community Bank and let us talk you through your options. We have saved our communities hundreds of thousands of pounds since 1982 when compared to loans like Morses Club and the other doorstep lenders, and we continue to be committed to providing affordable borrowing opportunities for all members of the community.

The Debt Camel website provided a detail explanation of why Morses Club has gone into administration which we would recommend reading here.

Do I continue to repay my current Morses Club loan?

You are not expected to repay your loan in full immediately because of the administration, it is very important that you continue to repay as normal because you borrowed the money.

The administrator has stated

“Any payments due in respect of your outstanding loan balances should continue to be paid as normal, as not doing so is likely to impact your credit score and ability to borrow.“

However if you are struggling to make repayments then you are advised to contact the Morses Customer Service team on 0330 045 0719 and ask for a payment arrangement. You can also speak to the National Debtline on 0808 808 4000.

Loans like Morses Club offered are rarely in the best interest of the applicant. They’re in the best interest of the company offering them. Profit is the name of the game after all. As Northern Community Bank is a not-for-profit co-operative, our attention is focused solely on the applicant and their financial situation. That’s why we’re able to offer such competitive interest rates. We’re more than just affordable interest rates though. We pride ourselves on unbeatable service, too. Our experienced staff are on hand every step of the way to guide you through the process. We provide a ‘Save As You Borrow’ scheme in order to create financial stability for the account holder. And we even offer a free bereavement fund benefit on savings and loans.

Morses Club’s loans tended to be for small amounts at relatively high interest rates. Jumping from one high cost lender to another will only result in kicking your finance problems down the road. That’s why family-friendly community banks across the country are now striving to help fill the gap left by Morses Club, but in a fairer, more ethical way.

So before you jump from one high cost lender to another, speak to a member of staff at any of our branches in Burnley, Nelson or Colne by calling 01282 691333 or apply online here, and give us the chance to put your mind at rest.

Budgeting

December 21, 2022 12:24 pm Leave a Comment

What is a budget and how can I do it?

We all know the feeling, we receive our income and the by the time we’ve paid a couple of bills there seems to be nothing left? If you’ve not experienced this great, you don’t need to budget…or is the completely true? Even the most money savvy people want to budget better.

Budgeting can be as complicated as you like, you can mark down every penny you spend, you can portion it off for different expense but it is as simple as

Balancing your expenses with your income. If they don’t balance and you spend
more than you get, you will have a problem. Many people don’t realise that they spend more
than they earn and slowly sink deeper into debt every year “

My money coach

Different budgeting tools

There are a number of ways to check where you are spending your money. Click here for the Money Advice Service budgeting tool which is excellent. Another easy way is with a piece of paper;

Make a list of your incoming money – Wage, benefit entitlement, children’s board, maintenance, pension, and returns on savings or investments
Then make a list of all your regular outgoings or expenses – Food shopping, rent or mortgage, Gas/Electric, council tax, insurance, child care cost, loans and credit agreements, mobile contracts or top-ups, internet, travel expenses such as car/public transport, socialising and any other regular payments
To recalculate income/expenses from weekly or fortnightly to monthly
- Weekly to Monthly: £Figure x 52 divided by 12 = monthly
- Fortnightly to Monthly: £Figure x 26 divided by 12 = monthly

4. Take the monthly income figure and minus the outgoing/expenses figure

If you have a minus number, you have a problem where you are spending more than you receive
If you have a plus number, you have money left over and according to your budgeting sheet have money to spend after paying all expected bills. I’ve got a plus number but know I never have that much left over? At this point you need to re-evaluate whether you have included all outgoings, the Money Advice Service budgeting tool will allow you to dig deeper and identify areas of spending

Another basic model for budgeting is the 50/30/20 method. Nerdwallet explain how your monthly income should be split 50% for things you need, no more than 30% on wants and 20% on debt repayment and savings.

Wants and Needs – what to do next

If you do not have enough money at the end of the budgeting process, then you need to use the information to list what outgoings you can not live without and what spending you could cut out or reduce.

How do I divide my money after I’ve worked out my budget?

There is no right way to do this, some suggest that you jam jar you income, where as some manage to do this with good money management, without physically moving income around.

Jam Jar – when your income arrives, create ways to split into manageable amounts for your expected outgoing. Things you need first – Food, housing, utilities, childcare, travel, loans and credit. Then the remaining surplus money can be used for ‘wants’ and saving.

Many people use different bank or savings accounts to carry out the jam jarring. Some account holders use physical envelopes, jars or money bags to separate money. At Northern Community Bank we have a Bill Planning savings account which can help you to budget your money in this way.

Budgeting allows you to create a spending plan for your income, it ensures that you will always have enough money for the things you need and then identifies the remaining money for things that you want and are important to you. It does not always work but by having the figures in front of you it allows you greater control over your finances.

How will an IVA or bankruptcy affect me

July 24, 2022 3:04 pm Leave a Comment

Television and newspaper adverts are increasingly telling people how easy it is to wipe your debt off and start again. However are people being shown the full picture when considering an individual voluntary arrangements (IVA) or bankruptcy?

At Northern Community Bank we occasionally come into contact with members of community who have chosen to go down the various routes to wipe their debts but have not always been aware of the consequences that are attached. Some limiting restriction only affect people whilst in the process; however there are side effects that impact on a person ability to borrow in the future or even on household status.

As a Community Bank we encourage any saver or borrower who has an account with Northern Community Bank and feels they are struggling to cope with their debt to get in contact as soon as possible. Any responsible lender should attempt to work with a borrower.

Bankruptcy and IVAs should be seen as a last resort and in many cases may not be necessary. Contacting creditors to arrange informal arrangements to reduce debt within a person’s budget could be a far better solution.

If you have extreme debts, a formal debt solution – bankruptcy, individual voluntary arrangement or debt relief order may be the only way back. It’s not a step to be taken lightly, and you should ALWAYS seek debt advice first.

Martin Lewis, Money Saving Expert

The world is awash with companies who promote the idea that they are helping people when clearing debt but many have financial motives at heart. There are a number of independent and free advice services available, we looked to StepChange for some of the negative impact on entering an IVA or bankruptcy.

What do an IVA and bankruptcy have in common?

There are a few things that an IVA and bankruptcy have in common, regardless of which one you go ahead with. They would both:

Be recorded on your credit file for six years from the date they begin. While this information is on your credit file you may find it difficult to take out any further credit.
Mean your name is entered on the Individual Insolvency Register. This is an online database of everyone who’s gone bankrupt or been in an IVA or debt relief order.

Will bankruptcy or an IVA affect my job?

Some jobs might be affected if you’re on an IVA or go bankrupt.

The best way to find out if an IVA or bankruptcy would impact on your job is to check with your professional membership body or trade union, or ask to speak to your HR department confidentially.

Bankruptcy is more likely to affect your job than an IVA, and in both cases it’s more likely to cause a problem if you work at a senior level.

How will an IVA or bankruptcy affect my home?

IVAs and bankruptcy will have different effects on your home, and this will depend on whether you rent or own it.

If you rent your home during an IVA: If you rent your home, an IVA should have no effect and it’s very unlikely you’d need to move.

If your rent your home and go bankrupt: If you go bankrupt you can usually stay in the same property if your rent is up to date.

However, some private landlords include a condition in the tenancy agreement which means you could be asked to leave if you go bankrupt, You could also lose your home if you have rent arrears when you go bankrupt.

If you own your home during an IVA: You won’t be forced to sell your home but you might be asked to remortgage it six months before the end of your IVA. You’ll only have to remortgage if it’s affordable, and if you can’t, you might have to either pay an extra 12 months of payments into the IVA, or raise money from a third party instead.

If you own your home and go bankrupt: If you’ve got equity in your house it’s very likely that the official receiver (who deals with your bankruptcy) will make you sell it. If there isn’t any equity in it, you may be able to keep it.

Owning a car during bankruptcy or an IVA

If you apply for an IVA you’ll normally be able to keep your car (or van, or motorbike) as long as it’s a moderately priced make and model.
If you apply for bankruptcy the official receiver will expect you to sell your car (or van, or motorbike) unless it’s essential (for example, you couldn’t get work without it) and it’s got a low value.

Many people are surprised when they finish an IVA or come out of a bankruptcy order that they still struggle to obtain credit and have a poor credit rating. It can be difficult to obtain a mobile phone contract, let alone a bank account or mortgage.

As a Community Bank we encourage you to contact us and try to agree a solution within your budget before going down a route that could affect you for many years to come.

Using 0% credit cards smartly

December 26, 2021 12:48 pm Leave a Comment

0% Credit Cards

There is no doubt that 0% credit cards and balance transfer can be helpful if used smartly. At Northern Community Bank we talk to many people who took out 0% credit cards with the intention of using them correctly and taking what is often considered the cheapest from of credit. However problems occur when balances start to increase and making repayments get more difficult.

With a 0% credit card you make purchases and do not pay interest for set number of months. 0% balance transfer credit cards are often used to switch credit card debt from one lender to another, if used correctly it gives the borrower time to reduce the balance whilst paying no interest. However the 0% interest period will not last forever and to use the transfer effectively people need to concentrate of clearing the balance, not increasing, before the period finishes.

Only paying the minimum payment once the 0% period finishes

Credit card companies offer the low or 0% periods because they judge that a number of borrowers will not clear or reduce their balances before the introduction period finishes. We have found that over the years problems start to occur when the 0% period finishes and borrowers are unable to switch to another 0% credit card. When credit card users only pay the minimum monthly payment it really starts to get expensive and difficult to get out of

£2,611 – Average household credit card debt in the UK
24.65% – APR Average interest rate on credit cards in the UK, with 48.6% UK credit cards bear interest
27 years – How long it will take to clear the average balance when making the minimum monthly payment on a credit card

The Money Charity calculated that the minimum repayment in the first month would be £74. If £74 were paid every month, the debt would still take 4 years and 11 months to clear with no extra spending.

We turned to U-switch, one of the UK’s leading comparison and switching services to find out what interest rates the different credit card providers charge.

Representative interest rates means that only 51% of applicants have to be accepted for the advertised rate, meaning a large number can end up being charged a higher rate of interest on balances. At Northern Community Bank on loans over £3000 all borrowers who successfully apply for a loan are charged 12.7% APR.

Credit cards have been used in the UK for over 50 years however the last 20 years have seen a large increase in their use, with some balances spiraling out of control. Northern Community Bank has been available in the communities to help to relieve the financial stress caused when 0% credit card deals end and repayments feel like they are going nowhere.

Speak to one of our highly trained members of staff today if you think we may be able to help your situation.

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