Credit unions have achieved the highest overall satisfaction rating from customers, ahead of mainstream banks and building societies, Smart Money People has found.

The firm’s survey of more than 150,000 consumers revealed that as well as coming out on top for overall satisfaction, scoring 4.91 out of five, credit unions were also voted best value for money (4.81) and had a customer service score of 4.84.

The results, which have been released in partnership with Fair4All Finance, revealed that an "overwhelming majority" (97%) of credit union customers said they felt fairly treated.

This figure is above banks (96%) and was just behind building societies (98%).

Furthermore, 97% of credit union customers felt they understood the details of the products on offer, compared to 98.6% of building society customers and 93.9% of banks.

Director of innovation and development at Fair4All Finance, Diane Burridge, said that the findings "showcase the overwhelmingly positive experiences" of credit union customers and how they like to be treated and supported as consumers.

Burridge added: "Credit unions bring financial services into the heart of local communities, and often offer a more personalised service to members at a time when high street banking facilities are increasingly endangered.

"Credit unions provide a safe and reliable place to save money as well as a place to access affordable loans. The UK needs a strong combination of credit unions, banks and building societies working in partnership to better respond to customers’ varied needs so that no-one is locked out or overlooked."

Bank of England data has shown that loans issued by credit unions to members increased by 21% in 2023 to £2.3bn. This is the largest year-on-year change since records began in 2013.

Credit unions’ income also increased by record levels (28%), reaching £324.3m, which Smart Money People said demonstrates the "clear consumer demand for providers outside mainstream banks and lenders".

In 2023, total membership to credit unions reached 2.23 million.

Chief executive officer at Smart Money People, Jacqueline Dewey, concluded: "Our data demonstrates the important role that credit unions play in the market. At the heart of communities, they’re delivering products that meet their customers’ needs, and service levels that are amongst the best in the industry as well as ensuring financial inclusivity.

"We’ve seen significant growth in the number of reviews being left for credit unions in recent years. Customers really value the personal service, the encouragement to develop good financial habits, and the support offered which in many cases extends beyond the products offered. They are a vital part of the overall financial landscape and critical to the communities that they serve."

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