SAVERS have been promised their money will be repaid after a credit union has been closed.

The Financial Services Compensation Scheme (FSCS) has said that the savings of more than 800 members of the Redcar and Cleveland Money Tree and Glen Credit Union Ltd will be repaid.

The Credit Union had about 800 members who had invested around £200,000 but was wound up last week.

Although savers will not be allowed access to savings or to make deposits in their account immediately, in the majority of cases funds will be repaid within seven days.

An online statement from the credit union's board of directors said: "It is with great sadness and regret that we must write to notify you that a Winding Up Order has today been made against the Credit Union and that as a result, the Credit Union is closed."

The FSCS statement explained that members owed less than £1,000 will receive a letter they can cash at The Post Office. Those owed more will be sent a cheque.

Mark Oakes, head of communications for FSCS, said: "We're ready to help; your savings are safe. We will get your money back to you within the next week. The process is automatic so you won't have to apply for compensation. We will pay up to £85,000, so every member of the credit union is protected."

The Redcar closure comes in contrast to the success of The Tees Credit Union (TCU) in Stockton, which recently saw its membership increase by 350 since this time last year and aims to increase its membership from its current 2,053 to nearly 8,000.

Another credit union in Redcar was also wound up in 2010 and the North Yorkshire Credit Union was liquidated in 2012.

Earlier this month, the FSCS bailed out nearly 1,000 savers of a Belfast-based Credit Union after it was wound up on October 17, 2014.

Credit unions, which offer credit at lower interest rates, sometimes get into trouble when they lend too much in an effort to prevent people using very high interest payday loans.

FSCS protects up to £85,000 of savings or £170,000 for joint accounts. It has come to the aid of more than 4.5m people since 2001 while paying out over £26bn in compensation.

Financial services firms fund FSCS through a compulsory annual levy.

Last year, The Northern Echo supported the credit union movement across the region by offering free advertising.