WATCH OUR HISTORY CHANNEL, UNTOLD LONDON, ON YOUTUBE

USERS relying on a credit union to access cash were left reeling yesterday (Thursday) when it was announced it had collapsed and the administrators had been called in.

The London Community Credit Union has more than 17,000 members – many of whom were on the phone or firing off emails trying to make sure that their savings were safe.

Administrators said that all deposits would be returned in full and that they were fully protected.

Borrowers who owe the credit union loan repayments will be contacted, but are expected to carry on the same schedule.

The LCCU, which began life in 2000, serves people who live or work in four boroughs, including Islington, and it had offered free meetings to discuss money worries and get debt advice.

The idea of a credit union has been celebrated as a way of helping people by pooling local savings to then lend to people priced out of bank loans by high interest rates or with a low credit score.

Customers were urged to use them rather than the sky-high cost of pay day lenders, while those paying in were attracted to the idea of “ethical saving”.The new Labour government had suggested it wanted to help more mutuals survive the tough economic conditions.

But rumours of the LCCU potentially being in trouble first emerged online just before Christmas.

James Sleight, of PKF Littlejohn Advisory, the administrators, said: “We want to reassure all of LCCU’s members that their money is safe and they do not need to worry. Members do not need to take any action to receive their savings balance… We will also be writing to all members shortly with further information.”