Credit union with thousands of customers goes bust
A LONDON-BASED union has gone bust, leaving 17,000 members without access to their accounts - but savers will get their cash back
The London Community Credit Union (LCCU), which served members across several London boroughs, was placed into administration on January 22.
Joint administrators James Sleight and Stratford Hamilton of PKF Littlejohn Advisory Limited have now taken charge, confirming the co-operative has ceased trading.
Fortunately, there’s no need for members to panic, as protection under the Financial Services Compensation Scheme (FSCS) means everyone gets their savings back.
All accounts, up to the £85,000 limit per individual, are fully protected.
Savers will receive their money automatically within seven working days of the closure date.
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Most members will get an email from FSCS explaining how to request their payment, which can be sent via cheque or bank transfer.
Those without email access don’t need to worry – a cheque will be sent to their registered address without them having to lift a finger.
LCCU was a financial co-operative helping people in boroughs like Hackney, Tower Hamlets, and Islington save and borrow money.
Its sudden closure will come as a blow to the local community, but administrators have stressed that support is available for anyone with questions.
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For members who make regular payments such as salaries, benefits, or rent into their accounts, there’s advice on how to set up new arrangements.
Borrowers are also being contacted about next steps for their loans.
Administrator James Sleight acknowledged the impact of the collapse, saying: “This is, of course, hugely disappointing news for members and the local community.
"But I want to reassure everyone that their money is safe, and all deposits will be returned in full by the FSCS. Members don’t need to take any action to get their savings back and will hear from us or the FSCS shortly.”
Members don’t need to take any action to get their savings back and will hear from us or the FSCS shortly.”
While the FSCS and administrators are working hard to ensure a smooth process, customers are being urged to watch out for scammers.
If anyone is contacted unexpectedly by someone claiming to be from the credit union or FSCS, they should hang up and use official contact details to check.
For further information, members can visit the LCCU website, email the administrators at [email protected] or call
The FSCS also has a dedicated portal to manage payments and answer any queries.
What are Credit Unions
Credit unions are locally-based organisations where members pool their savings to lend to one another.
This often allows them to offer low cost products and there are hopes that the sector can provide an alternative source of finance to banks and high cost pay day lenders.
They can offer a range of savings accounts, current accounts and loans to their members. You have the flexibility to save how much you like, when you like.
StepChange Debt Charity has called credit unions “an important and valued part of the financial landscape”.
To be eligible to join a credit union, you typically have to have the same “common bond” with other members, though some credit unions have relaxed their criteria.
The common bond may be with people living or working in the same area, work colleagues or people who belong to the same organisation, such as a church or trade union.
You can also use credit unions to take out loans, usually at a better rate than most high-street lenders.
Some unions require that you have already saved money with them before you can take out a loan, but others don’t.
Interest rates can vary, but are capped by law at 42.6 per cent APR, which is considerably less than many short-term loans, including a payday loan.
Is your money safe?
Your money is completely safe.
Over 73 credit unions have gone under in the past decade.
Matt Bland, head of policy at the Association of British Credit Unions (Abcul), said recently: "We do unfortunately see a number of credit unions fail each year. Typically the credit unions that do fail are very small, with a few hundred or maybe a thousand people using them.”
But regulations are in place to act as a safety net.
Any eligible deposits you held with LCCU is protected by the UK’s deposit guarantee scheme, the Financial Services Compensation Scheme (FSCS). As LCCU has now failed FSCS will step in to repay your money.
James Sleight and Stratford Hamilton of PKF Littlejohn Advisory Limited are the appointed Joint Administrators.
They will contact you by post with documents about the administration for your information only.
What to do if you don't have another bank account
If you don’t have another bank account, it’s important to act quickly. You’ll need to open an account with a bank, building society, or credit union so your payment can be processed, and you can access your funds.
For those who prefer to stay with a credit union, you can find information about alternative options through the Association of British Credit Unions Limited (ABCUL) .
If you’re based in Scotland, the website provides useful resources and information about credit unions in your area.
To assist members, the Joint Administrators will regularly update with guidance on opening alternative accounts and other essential updates.
If you’re unsure where to start, your local Citizens Advice Bureau can help you open a bank account.
You can also visit your nearest high street bank or building society for assistance.
For residents in Hackney, Newham, or Tower Hamlets, Citizens Advice East End offers advice and support.
Citizen advice branches
For residents in Hackney, Newham, or Tower Hamlets, Citizens Advice East End offers advice and support.
Hackney branch:
- Address: Hackney Citizens Advice, 300 Mare Street, Hackney, London, E8 1HE
- Website:
Helpline: 020 3880 2023 (for access information or cancellations) - In-person Assessments: Wednesdays and Fridays, 9:30am to 12pm at 1 Hillman Street, London, E8 1DY.
- Office Hours: Wednesday to Friday: 9:30am to 5:30pm
Stratford Branch:
- Address: Newham (East End) Citizens Advice Bureau, 123 Star Line, The Hub, 2nd Floor, London, E16 4PZ
- Website:
- Helpline: 020 3855 5233 (leave a message to receive a callback)
- Office Hours: Tuesday, 10am to 12pm (drop-in service available).
It’s best to contact your local Citizens Advice service for tailored assistance, as some locations only support residents of their area.
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You can search for your nearest bureau on the website.
By taking swift action, you’ll ensure your funds are ready for use when your compensation is processed.