The Ultimate Guide To Savings and Loans
Put simply, savings and loans are two tools that people use to manage their finances during different times in their lives. If you have any disposable income, then you may choose to save that money. If you wish to make a large purchase or need extra money to cover an unexpected bill, then you may consider taking out a loan in order to spread the cost over time.
By regularly saving money from your income that you don’t need to meet your immediate financial outgoings, you can build up a substantial pot of funds to meet your future needs over time. Savings are a net surplus of funds for an individual or a household, after all their expenses and other financial obligations have been met.
They can be kept in the form of cash or cash equivalents, which are not exposed to the risk of loss. This differentiates saving from investing where the aim is to secure a higher return but a greater risk of loss is accepted as a result. Savings represent a steady and reliable way to build wealth over a period of time and will usually receive modest interest rates
Loans are money that is advanced to the borrower with an agreement to pay it back over an agreed time period. A rate of interest and finance charges will usually be added to the principal value that the borrower must repay. Loans can be for smaller or larger amounts, with repayment terms that run from days to decades. They come in a variety of different forms including secured, unsecured, personal and business loans.
The term loan refers to a type of credit vehicle in which a sum of money is lent to another party in exchange for future repayment of the value or principal amount. In many cases, the lender also adds interest and/or finance charges to the principal value which the borrower must repay in addition to the principal balance. Loans may be for a specific, one-time amount, or they may be available as an open-ended line of credit up to a specified limit.
In this guide, we’ll take a look at savings and loans and some of the ways in which you can sensibly save and borrow money to help you better manage your finances, build wealth and meet unexpected expenses.
A brief history of Savings & Loans associations
The first savings bank in the UK was founded in 1810 by the Reverend Henry Duncan, the minister of Ruthwell Church in Dumfriesshire. This is now home to the Savings Bank Museum, in which there are interesting records relating to the history of the savings bank in the UK. Prior to that, building societies have existed in the UK since the 1770s and these have evolved into savings and loan associations similar to what you see in the US.
In the USA, a savings and loan association (S&L) refers to a financial institution that accepts saving deposits and makes loans for a wide range of purposes, including mortgages. These institutions are frequently mutual, which means that depositors and borrowers are members of the institution and have voting rights. This gives them the ability to direct the goals of the organisation and how it serves its members and the wider community.
Savings and Loan associations have their roots back in the earliest days of US banking. At the beginning of the 19th century, banking was largely still the preserve of people who had significant assets and wealth. The Philadelphia Saving Fund Society was established in 1816, and by the 1830s these were widespread.
However, Savings and Loan Associations in the US can trace their roots to the aforementioned building societies, which were founded on the mutual principle and have roots stretching back to the 1770s in the UK.
The original concept of building societies still holds true; meeting the needs of local communities, families and individuals, particularly those with more modest incomes and savings.
What happened to Savings and Loan Associations in the US?
Unfortunately, changes to the regulatory environment in the US at the end of the 1980s removed the walls that separated commercial banks from Savings & Loans. This meant that many S&Ls were subject to takeovers while others became banks.
Prior to that, spiraling inflation and interest rates in the late 70s and early 80s brought on a recession, where S&Ls suffered disproportionately. Instances of fraud compounded the problem, meaning that the number of S&Ls still operating in the US is now a fraction of what it once was.
Community Banking in the UK
In the UK, building societies, friendly societies and credit unions have fulfilled the community banking role of Savings & Loans.
Once there were hundreds of building societies across the UK. In fact, nearly every town in the country had a building society named after it. Many were very local, merging with larger institutions over time, with the number of societies overall decreasing substantially through the decades.
Other societies opted for demutualisation, becoming banks, which in the great majority of cases were themselves taken over. Most of the existing building societies are the result of the mergers of many small societies.
Friendly Societies are one of the oldest types of financial institutions. They are mutual aid organisations formed voluntarily by individuals to protect members against debts incurred through illness, death, or old age.
The role of Friendly Societies became acknowledged by the Government and membership was encouraged. The act of 1875 called for a system of auditing and registration. People joined Friendly Societies in large numbers and by the late 1800s, there were approximately 27,000 registered Friendly Societies.
At the end of the nineteenth century, friendly societies provided most insurance, benefits, and pensions across the UK. Many were founded in particular locations, or to support different trades and occupations. The Transport Friendly Society, for instance, was founded in the late 18th century to allow cab drivers and later bus drivers to save a penny a week for their retirement or to protect them against periods of incapacity due to ill health.
They acted as an informal and voluntary Welfare State and were often the only way a working person could receive financial help in times of sickness or injury. Without this protection, they may have ended up either begging or living in a poorhouse.
There are around 200 friendly societies operating in the UK today, and their ethos is the same. They aim to help people take better control of their finances within an organisation that is run and owned by its members.
Credit Unions are a more recent development in community and mutual financial services. The first credit union in the UK began trading in 1964, and they have since grown to provide loans and savings to more than 1.2 million people across the country.
The Credit Unions Act 1979 for the first time regulated credit unions in the UK. The Act required that all credit unions register with the Registrar of Friendly Societies, who was responsible for ensuring that credit unions had a “satisfactory” common bond and adhered to a common set of rules.
The registrar was tasked with monitoring the activities of credit unions, which had to submit quarterly and annual returns to the registrar. The Act allowed the registrar to suspend a credit union’s operations, strike credit unions from the registry and prosecute illegal financial activity by a credit union.
By 1982, 73 credit unions were registered. From the late 1980s to the early 1990s the registration of credit unions surged, increasing fourfold between 1987 and 1994. Between 1994 and 2000 a large number of small credit unions closed or merged with other credit unions. In 2000, 660 credit unions were regarded as officially registered. A further 220 credit unions had failed to submit their annual return to the Registrar.
Credit unions in the United Kingdom have been regulated by the Prudential Regulation Authority for prudential purposes and the Financial Conduct Authority for conduct purposes since 1 April 2013.
Since October 2008, UK credit unions are covered by the Financial Services Compensation Scheme (FSCS), which protects savings in banks and similar institutions up to £85,000. This covers around covering 98% of all savers and most members get their money back within a week.
Transave is a not-for-profit financial co-operative offering instant access savings and affordable loans direct from your pay, making it easier to save. We are in effect a Credit Union, and as with other Credit Unions our aim is to make it easier for people to build financial resilience, save for their financial future and meet any challenges along the way.
We also provide competitive personal and instant loans with a maximum value of £20,000 and £3,000 respectively, giving people a real alternative to payday and other expensive forms of credit.
At their most basic, savings are the money that a person has after spending. They may be as simple as saving pound coins in a piggy bank, or they might be putting money into a savings account. Either way, when people save, they do so for a variety of reasons.
People may save to provide added financial security or meet life goals and aspirations. They may save for their own retirement, to help pay for their child’s education, or as a down payment for a car or a home, or perhaps the holiday of a lifetime. Many people save to give themselves financial security and added resilience. With savings, people are better able to cope with unexpected life events such as the loss of a job, a broken down boiler, or expensive repairs to a necessary vehicle.
While many people will have a single savings pot that they use for all kinds of reasons as and when necessary, others will have different savings for a range of different goals.
Some of the most common types of saving categories are:
Every household is advised to have a savings pot set aside for emergencies. This is money that you will draw upon in the case of unexpected expenses such as a washing machine or boiler breaking down. Many people will also save enough to ensure they can cope with losing their jobs.
It’s generally advised that households should have at least three months of their income saved in their emergency savings. For extra security, many people try to save 6 months’ worth of their income. This puts them in a strong and secure position and able to cope with financial shocks or reductions to their income. Emergency savings will usually be saved in a basic easy access savings account.
When you begin saving, it’s generally advised that you build up your emergency savings first before thinking about your other goals.
Saving for a particular purchase
It’s generally thought that saving isn’t particularly fun and can be onerous, but that needn’t be the case. Saving for a particular financial goal can be rewarding as your hoped-for holiday, a new car or sofa gets closer to becoming reality. As well as helping you become more secure, regular savings can help you realise your dreams.
You might choose to save a certain amount on a monthly basis that will get you to your goal by a specific date, or you might choose to save as and when you can.
After you’ve established your emergency savings, then you may identify something that you would like to save for. Regular disciplined saving can help you turn a dream into a reality. People use a variety of savings vehicles to save for particular purchases, but in many cases, an easy-access savings account will be the best option.
Saving for life goals
As well as saving for specific purchases, you may have particular life goals that you would like to save for. Many people will want to save to help supplement their pension, save a deposit for a house, save for their children’s education or for care costs in old age. Whatever the target, saving for life goals is incredibly important, helping people face the future with confidence.
People will use a variety of different vehicles to save for important life goals depending on how soon they are likely to need their money. If they have ample emergency savings, then they may opt for longer notice savings account to enjoy a higher interest rate.
A loan is an advance of money that you receive from a financial institution, which you then repay back in instalments over a particular timeframe. Usually, the loan will incur interest. This interest rate may be set and fixed at the beginning of the loan agreement or it may vary over the course of the loan, as is often the case with mortgages.
Loans can be for small amounts to help cover an emergency, they can be a short-term loan to facilitate a purchase, or they can be over a longer period to make a large purchase or provide finance to a business or organisation.
The amount that people are able to borrow will depend on a number of factors such as their income, their credit score and the length of time they will need to repay it. Loans are increasingly varied and flexible, with repayment terms, loan amounts and interest rates that are charged differing widely.
What are the different types of loans?
There is a range of different options when it comes to loans. When you’re researching borrowing options, you will come across products that are described as either secured or unsecured.
A secured loan is money you borrow secured against an asset you already own. In most cases, this will be your home. Interest rates on secured loans tend to be lower than what you would be charged on unsecured loans, but they do carry much greater risk.
If you find yourself unable to repay your loan or you fall behind with your payments, it’s possible that your home or other asset might be repossessed. A mortgage is a type of secured loan where you are borrowing money for the asset that your loan is secured upon.
An unsecured loan is a straightforward loan where you are not borrowing money against an asset. Instead, money is loaned purely on the strength of your income and credit history. You borrow money from a bank or other lender and agree to make regular payments until the loan is repaid in full, along with any interest that has been incurred. Because unsecured loans aren’t secured on your home or other assets, the interest rates are often higher.
An unsecured loan – also called a personal loan – is more straightforward. You borrow money from a bank or other lender and agree to make regular payments until the loan is repaid in full, together with any interest owed.
Because unsecured loans aren’t secured on your home, interest rates tend to be higher. If you are late making a payment or you miss a payment, you may incur additional charges. This can also damage your credit rating. Unpaid, unsecured loans may be pursued through the courts.
There are also other types of loans, including credit union loans, payday loans and peer-to-peer loans.
Who might want a loan?
There is a range of reasons why people might choose to apply for a loan. They may wish to buy a car or pay for a wedding. Loans are frequently taken out to pay for significant home improvements, such as extensions or loft conversions. Other large purchases, such as holidays, are sometimes paid for with unsecured loans.
People who are starting a business or looking to expand an existing business may use a loan.
Loans are sometimes taken out to consolidate a range of other debts such as credit and store card debts, outstanding bills and other payments. These can spiral out of control if they are left unpaid, particularly in the case of payday loans which have very high rates of interest and are designed to be repaid quickly.
A consolidation loan enables someone to pay off their other debt and then have a single payment to make, often at a lower interest rate over a longer period of time.
How much do loans cost?
The cost of a loan can vary considerably depending on the amount you are borrowing, your own creditworthiness and the time period that you will take to repay your loan.
The interest rate for loans can also vary significantly, with interest rates ranging from 0% for smaller short-term loans and retailer schemes to 1,250% APR over a 12-month period on a payday loan.
In the case of the latter, the loan is intended to help people bridge a short period until they are paid. Then, if the loan is quickly repaid, the overall amount charged for the loan is relatively small. If, however, people are unable to repay their loan quickly and agree to repay over time, or if they default on a repayment, the charges for payday loans can be considerable.
Credit union loans provide an alternative to payday loans with a competitive interest rate that helps people avoid falling into a debt trap.
Another cost to consider when applying for a loan is an arrangement fee. These can be a few pounds for a small loan to several thousand pounds for a mortgage or other large loan.
Saving and borrowing with a credit union
The savings and loans market in the UK is vast and varied. There is a wide variety of ways in which someone can save or borrow money, with a range of different institutions providing services to individuals, companies and organisations.
Credit Union are an effective way to save and borrow money by encouraging you to save what you can and to borrow only what you can realistically afford to repay. They are savings and loan co-operatives, with members pooling their savings together to lend to each other. Members also help to run the credit union and determine its policies.
Unlike other financial institutions, credit unions operate on a ‘not-for-profit’ model, which means that cash is only used to run services and reward members. It isn’t used to pay outside shareholders, unlike most other financial institutions.
Credit unions have to take a careful approach to managing their members’ money. This means they need to ensure that they hold enough money to prevent them from going bust. Any money that is left over is redirected back to people who have a savings account in the form of interest, or it’s used to try and improve the overall service that people receive.
There are no hidden charges with credit union loans and no penalties if you repay the loan early. Some credit unions will only lend to you if you are a member and will base the amount they are willing to lend on the amount that you have saved. This ensures that someone doesn’t overstretch themselves and that members are protected.
What are the interest rates on credit union loans?
Interest rates differ from credit union to credit union. Your interest rate will also be dependent on how much you wish to borrow. There are, however, strict rules governing the interest that credit unions are able to charge.
In England, Scotland and Wales, there’s a cap on the amount of interest that credit unions can charge on their loans of 3% a month or 42.6% a year APR. The cap in Northern Ireland is 1% a month, or 12.68% a year APR.
While it’s possible to find cheaper loans from other lenders, particularly if you have a very good credit score, credit union rates are much lower than you are likely to find from a payday lender. Most credit unions can lend for up to a maximum of ten years on an unsecured loan and up to 35 years on a secured loan. Not every credit union will offer a longer-term loan.
Why do rates and allowances differ?
Different credit unions have their own individual policies regarding how much members can borrow, interest rates and repayment schedules. Different credit unions have different priorities, and the amount they have saved and are able to lend from can vary widely. All of these factors will determine interest rates on both savings and loans, as well as maximum loan amounts and repayment schedules. All credit unions have to abide by the statutory regulations.
How are credit union loans different from other loans?
Credit unions can provide an alternative to mainstream personal loans and banking, providing a responsible lending service and savings products for members. In essence, they are no different from other loans, in that someone borrows a certain amount of money and repays it over an agreed period of time.
The key difference is that the interest that can be charged by a credit union is tightly regulated and there are no hidden charges. Another difference is that the credit union is not trying to make a profit on the loan. They offer a dependable, and ethical alternative to other types of lending.
How are credit unions regulated?
Credit unions are very tightly regulated in the UK to protect their members and to ensure that they meet their particular remit. Credit unions are dual-regulated, which means that they are regulated by both the Financial Conduct Authority (FCA) and by the Prudential Regulation Authority (PRA).
All money saved in a credit union is protected by the Financial Services Compensation Scheme up to the value of £85,000 per person. This is exactly the same level of protection as savings in a bank or building society, and it more than covers the vast majority of UK savers who will usually have considerably less than that amount saved.
How and when do you have to pay off loans?
You will be required to pay off your loan according to the repayment schedule you agreed to. This can be as little as a few months, or it could be several years. In the case of small personal loans, the repayment schedule will usually require borrowers to repay their loans within a couple of years. For larger loans, this will rise to 4 to 5 years.
How and when should you set up a savings account?
Everyone can benefit from saving regularly, whatever their income, financial circumstances and goals. Building regular savings gives you extra security and financial resilience, as well as helping you save towards particular long-term goals such as retirement. Saving can be a great way to save for larger purchases such as a car or a once-in-a-lifetime holiday.
Different types of credit union loans
Most credit unions will offer personal loans over a two to a five-year repayment plan, and ten years for secured loans, although there are some who may offer longer repayment periods.
The interest on credit union personal loans can compete well with those offered by high street and online lenders but will usually be marginally higher than the cheapest credit cards and loans. If you find yourself turned down for credit or have a less than 100% credit score, then these rates can often work out much cheaper than many of the alternatives.
Transave loan options
Transave provides both an instant loan and a personal loan option. The Transave Instant Loan allows members to borrow from £100 to £3,000 which can be repaid over 1 to 24 months. Repayment plans are affordable and flexible, you can choose to pay off your loan over 1, 2 or 3 months for loans up to £50 and over 1 to 24 months for loans between £500 and £3,000. Members can apply for an instant loan as soon as they opened a savings account with Transave.
If you were to borrow £500 with a 2-month repayment schedule, the interest rate would be 26.8%, making a total repayable amount of £515.78. If you were to borrow the maximum of £3,000, the interest rate would remain 26.8% with a total repayable amount of £3,908.08.
The Transave Personal Loan allows you to borrow higher sums of money. Members can apply for up to five times the amount in their savings to a maximum of £20,000. Your savings then act as security on the loan and cannot be withdrawn as long as your loan balance exceeds your savings balance. If you have £600 in your savings, you can borrow up to £3,000.
The interest rate on Transave Personal Loans is set at 12.7%. If you were to borrow £10,000 over 36 months, you would have a monthly repayment of £335.40 and would pay back £12,074.41. If you were to borrow the maximum of £20,000 over the maximum period of 72 months, your monthly repayment would be £398.11 and your total repayment would be £28,664.08
What if you struggle to make repayments?
On the whole, credit unions provide greater flexibility if someone runs into financial difficulties.
Most credit unions emphasize that you should talk to them and warn them if you’re struggling, so they can find ways to help with a new payment plan or some other remedial measures.
It’s worth remembering, however, that a credit union will still consider applying penalties, fees and other consequences if you default on your borrowing.
What are the benefits of applying for a credit union loan?
Credit union loans provide a realistic and affordable alternative to high street and online lenders. If you find that you need extra funds to last until you are paid, then they can help you avoid the need for an expensive payday loan or provide you with the means to consolidate existing debt and make it more manageable. Credit union loans can be used for significant purchases, or to finance home improvements.
Whatever the reason you wish to borrow money, credit union loans are a practical option for a wide range of purposes. They provide affordable, ethical and upfront loans at competitive interest rates. The application process is easy to understand and a less than perfect credit record won’t mean immediate rejection. Credit unions are owned by members and driven by member needs; they are often more flexible than banks when it comes to issuing credit. But there are no guarantees. They will want to ascertain that you are able to afford the loan repayments.
Credit unions fill the gap for affordable and accessible loans for a wide range of people who may otherwise find it difficult to obtain credit or who may only be able to access expensive financial products.
Types of Savings
Credit unions are member-run organisations where members pool their savings so they can lend to one another. Traditionally, credit unions have been small, non-profit financial organisations set up by members with something in common, such as living in the same town, working in the same industry, or belonging to a particular trade union.
Some credit unions offer a fixed rate of interest on savings, but most give you a yearly pay-out called a ‘dividend’. The dividend is the way in which the credit union shares its profits with its members and the amount you receive, if any, will vary depending on how much profit the credit union has made in the year.
As with most UK high street banks and building societies, money saved in a credit union is covered by the Financial Services Compensation Scheme (FSCS). The FSCS savings protection limit for consumers is £85,000. If you have more money than the limit, some of your money will be at risk if your bank, building society or credit union fails. The overwhelming majority of UK savers have substantially less in their accounts than the £85,000 limit.
Credit unions will usually offer a range of saving products designed to meet the particular needs of their members. This might include a simple, regular savings plan, a junior savings scheme and a specialist savings account, such as one that rewards savers with entries into a prize draw rather than or as well as a dividend payment.
Different savings accounts will be better suited to different needs. Most credit unions will provide a regular savings account that allows you to make regular payments and withdraw your money without having to give notice. These will usually receive a dividend payment.
Transave Saving Accounts
Transave has three different savings accounts, all of which are in receipt of a dividend payment reflecting the performance of the organisation.
The Transave Regular Savings Account allow you to save from £5 per month to help you build up a pot of money for future use. Many Transave members save regularly for a specific purpose such as a holiday or Christmas. Other savers use the regular savings account to help build their own financial resilience, allowing them to know that they have funds set aside in case they are faced with unexpected bills or an emergency.
As long as your savings are not acting as security on a Transave loan you can withdraw them at any time without penalty. Funds will normally be credited to your bank account on the same day if requested before 1 PM.
To reiterate, Transave is a not-for-profit organisation, so any profit that is made is returned to savers in the form of an annual dividend which is likely to be more competitive than the returns on easy-access savings paid by high street banks.
You are free to alter the amount you save regularly at any time. You can also boost your savings by adding lump sums into your account by making an electronic bank transfer
Anyone who is already saving with Transave can also set up Junior Savings accounts for children up to the age of 16. Accounts are opened in the child’s name, with the adult member as a trustee. Regular savings (minimum £1 per week or £5 per month) need to be made into the account by adding to a regular payroll deduction or by setting up or adding to an existing Direct Debit.
The account is managed by the person who set up the account as the adult trustee. When the child reaches 16, the Junior Saver account is passed over to them. Their savings account will be converted to that of an adult member. Members are unable to apply for a loan until they are over the age of 18. Interest is paid at the same rate as the dividend on Regular Savings accounts.
A copy of the Junior member’s birth certificate or passport is required to open the account.
The Transave PrizeSaver account is the credit union savings account with monthly prizes. Every pound that members have in their account up to a maximum of £200, is entered into a monthly prize draw. There are 21 prizes up for grabs every single month, with a grand prize of £5,000.
The account is instant access and funds can normally be withdrawn at any time; however, this may not be possible if the total sum of your savings is less than the outstanding value of any Personal or Instant Loan you may have. It’s required that £1 is kept in the account to keep it open and to be entered into the monthly draws.
Prize draw winners are contacted via email, and if the saver wins the grand prize of £5,000, then they will be contacted to be asked where they would like the money to be paid. The funds in this account cannot be used to contribute to a savings multiplier to apply for any loans.
Unlike the regular saver, the PrizeSaver account doesn’t allow you to build up a nest over the £200 account limit. The account is instant access and funds can normally be withdrawn at any time; however, this may not be possible if the total sum of your savings is less than the outstanding value of any Personal or Instant Loan you may have. Please note that you must keep £1 in the account to keep it open and be entered into the monthly draws.
All savings accounts with Transave are protected for up to £85,000 by the Financial Services Compensation Scheme.
To meet the requirement to be a responsible lender we may carry out credit reference checks when considering loan applications.
However, we also give a lot of weight to the member’s savings record and any other relevant facts. Savings act as security for loans and as a result, we approve 96% of all loan applications received.
Saving and Loans help you better manage your finance
From their early origins, savings and loan organisations have provided a broad range of people with the means to better manage their finances. Credit unions aim to help you take control of your money by encouraging you to save what you can and borrow only what you can afford to repay. They are savings and loan co-operatives, where the members pool their savings to lend to one another and help to run the credit union.
What to consider with savings and loans
To become a credit union member, you need to visit or call your chosen credit union to confirm the information you will need to join. They will also advise you of the joining process as this may differ between credit unions.
Most credit unions will also have a website, with the majority providing an online application process for membership, loans and savings accounts. Some of them may provide online banking and account management services online.
To become a member of a particular credit union you will be required to share a ‘common bond’ with other members. This might include living and working in the same area or working for the same employer as other members. You may belong to the same church or religious group, trade union or other association. Organisations as well as individuals can also sign up.
Other factors you may wish to consider might include how you can make payments, the range of products on offer and how easy it is to withdraw your money if necessary. Credit unions should state that they are authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. They should also have their firm number displayed on their website to prove that they are legitimate.
Why join Transave?
Transave is owned by our members, not shareholders. This helps to make Transave a fairer, ethical alternative to both mainstream financial providers and payday and rent-to-own lenders. We are one family, in which our members save in order to help their fellow members borrow. We will also treat you like a real person and not just a number in our database.
We are proud of the fact that since our formation we have paid over £6 million in dividend payments on savings and saved members over £10 million in loan interest.
Our products are designed to help you meet your financial goals and to take better control of your money. If you’ve been struggling with loan and credit payments, then a loan from Transave can help you consolidate and simplify your debt into a single payment. We don’t take a one-size-fits-all approach to lending but consider each application individually.
Our instant loans are designed to meet urgent needs for funds and help you avoid the need to use an expensive payday loan company.
A 1.5% dividend on savings for the financial year ended 30th September 2021 was confirmed at Transave’s virtual AGM that took place on Saturday 22nd January and was paid into members’ savings accounts on 25th January. This is considerably higher than the average interest rate offered by other financial institutions on their easy access and Cash ISA products.
It’s one of the reasons why Transave continues to grow its membership rapidly as more and more company employees look to open a savings account that provides instant access as well as a competitive return on their savings.
Who can join Transave?
Transave provides payroll savings for a wide range of different companies that are listed here.
Alternatively, you can join via a Direct Debit if you work in one of the following sectors: Transport and Storage, Health Care, Social Care, Engineering, Manufacturing, Cleaning and Waste Disposal. Adult relatives living at the same address as an existing member are also eligible to join Transave.
Transave for employers
Transave partners with employers to support the financial well-being of their workforce with access to salary-deducted savings and loans. We already partner with significant companies and institutions including the NHS and South Yorkshire Police. Our services are offered free of charge to employers and there are no joining fees for individuals.
All services are provided directly by Transave and we accept individual and corporate liability for the operation of the scheme.
Transave is fully regulated by the FCA and the PRA, who are also responsible for banks and building societies. These regulators require rigorous financial systems, fully trained staff and internal/external audit systems.
Individual members are also covered by the Financial Services Compensation Scheme (FSCS) for all savings up to £85,000
Our loan rates have been designed to be an attractive alternative to the rates offered by traditional lenders. All profits after costs are returned to members as a dividend on savings. Over recent years, that has averaged around 2%.
Loan repayments are deducted from salaries which means that an employee is unlikely to default. This means that Transave is able to pass on lower interest rates for member loans.
Employers are not burdened with extensive administration when they use Transave saving and loan services for their employees. All the employer is required to do is to facilitate monthly deductions from salary. If an employee leaves, we will work with them to set up a direct debit to replace the former payroll deduction payment. This enables them to remain a member of Transave.