It’s an expensive business, not having enough money. Yesterday, I had the great pleasure of visiting Homes with Style, a social enterprise run by my friend and community entrepreneur Peter Mitchell.

HWS is an interiors store based in Huyton in Knowsley, which offers a great range of quality furniture at affordable prices. Alongside this, it works in partnership with Co-op Electrical and sells a range of its products.

But HWS doesn’t just sell the furniture and Co-op Electrical products. It also provides access to affordable finance with partnerships with two local Credit Unions, Enterprise and Riverside. This is critically important. In Huyton, there are several of the so-called ‘Rent to Buy’ stores selling similar goods. These stores offer a deceptively affordable weekly payment, sometimes as low as £4 – £10 per week.

What this disguises, of course, are the sky-high rates of interest: for example, 69% representative APR or similar. ‘Representative’, meaning that you have to have a credit record typical of their anticipated customer base to be able to get an interest rate that good. Sometimes, your actual rate is going to be even higher.

It also disguises the inflated price of the product. When buying a washing machine or flat-screen TV, many look at the weekly payment and not the purchase price. Very often, this is massively inflated – perhaps £678.15 for a TV that could be bought elsewhere for £399. On top of this, of course, customers then pay the inflated and usurious rates of interest (£677 in this instance if paying over 156 weeks).

And then there are reports of good-old- fashioned mis-selling in this sector. Customers have complained of being sold ‘optional’ extended warranties for fat additional fees, having not been given any ‘option’ at all. Scandal on top of exploitation heinously targeted at people struggling at the margin of our society.

Co-operators have long known the value of Credit Unions. Providing access to affordable credit and other financial products, it is co-operation writ large: working together to provide for one another.

What Peter and HWS have done is marry great-value prices with cheap, credit-union rates of interest. The Co-op’s Members’ Council has been championing just such a marriage for a long time.

And the savings are spectacular. Take the example of Hotpoint fridge. It costs £3.00 per week at a Rent to Buy store for 156 weeks – that’s £468 in total. The very same Hotpoint fridge costs £3.13 per week at HWS, for just 52 weeks – so that’s £162.47 in total. That’s a massive saving of £306, which means hundreds of pounds staying in the pockets of local families.

HWS is a tremendous success story – for the people that have made it happen, for their customers, and for Co-op Electrical. And it is a vivid demonstration of what we all know to be true – that there is a better way of doing business where everyone benefits.

Nick Crofts
President of the Members’ Council

Figures correct as at 17 Feb 2017

Join the conversation! 3 Comments

  1. Great news for Huyton, Nick, and an example of co-operation at its best.

    The 69% APR example you quote would be an absolute bargain at one of these ‘rent to buy’ shops. Quite often the rate is in the hundreds %. It is, literally, legalised theft from some of the poorest members of society.

    Here’s wishing HWS, and Co-op Electrical, every success in offering local people an affordable alternative to these rip off merchants.

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  2. Credit Unions are mini Co-operative banks. The more people who use them and support them the more they will grow. There has been massive growth in the UK in the last 40 years, but they have some way to go to catch up Germany where nearly a third of retail Banking is conducted by over 1000 Credit Unions. It is important they stick to their roots and are prudent and don’t get sucked into the exotic risks and high interest rates of the ‘Casino Capitalist’ Investment Banking.
    We have two Credit Unions in Hampshire which are doing an excellent job of providing savings and credit facilities.

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  3. Brilliant

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Guest blog, Membership