Havant savers won't lose out as union goes bust

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A savers' union set up to help low income households has gone bust owing nearly £100,000.

Around 260 people saved small amounts with the Havant Area Savers Credit Union, and could also take out low interest loans.

The Union had been going since 1996 but got into financial difficulties recently because not enough people were taking out loans to make income from the interest.

The vast majority of savers will be fully compensated within the next seven working days through the Financial Services Compensation Scheme. Borrowers must also continue paying off their loans.

Councillor Faith Ponsonby, who represents Leigh Park, said: 'It is very sad. I have been a subscriber to it for some time in order to try and keep it going. According to the information I have the Union just isn't viable any more.'

Credit Unions were established to encourage low income families to save and can be used by people without bank accounts. Interest rates on loans are far lower than those offered by commercial companies.

Havant Borough Council made a loan of 20,000 to the Union in 2008 to be paid back over 10 years. Council leader Tony Briggs said it is not clear when or if the loan will be paid back.

Mark Neale, chief executive of the Financial Services Compensation Scheme, said: 'We are committed to providing compensation as quickly as possible to eligible members of Havant Area Savers Credit Union who are now unable to access their funds.

'Those members will be entitled to compensation of up to 85,000 each, and they won't need to complete an application form to make a claim. Once we have the information we need about their account, we'll be able to pay them compensation automatically.'

Call 0800 678 1100 or go to fscs.org.uk