Deeside based supermarket Iceland launched interest-free loans to help struggling families with food bills

Updated: It seems this on only available “exclusively to new customers, the Food Club Card helps you stock up your freezer at Iceland, both in store and online, using a preloaded card.”

Deeside-based supermarket chain Iceland is offering a zero-interest loans scheme designed to help struggling families across the UK hit hard by the cost of living crisis.

The initiative, launched today, is the result of a link-up between the supermarket chain and Fair for You, a charity-owned lender.

Ahead of UK-wide launch, Iceland carried out 18 months of pilots in several areas including north Wales.

Called the Iceland Food Club, micro loans are made available on preloaded cards, with repayments set at £10 a week.

During the pilot, customers paid a “minimal” amount of interest on the loans, but Iceland had decided to invest an undisclosed amount “in making all loans completely interest-free for the national rollout”. Reports the Guardian.

Speaking to BBC Breakfast this morning, Managing Director for Iceland, Richard Walker said: “We are hearing stories every day in terms of the customers and their (cost of living) experiences, they’re talking to our colleagues about the till.”

“People are really struggling to make ends meet and often it’s the food spend (that suffers) because everything else is fixed like rent and council tax.”

“That’s why millions of people are now being driven to food banks or indeed to hunger.” He said.

Richard said: “We have come up with a really innovative approach which has not been done before.”

“We are collaborating with a not-for-profit, charity-owned social enterprise, where we are extending loans to people from anywhere between £5 to £75.”

He said: “Iceland will pay the interest and anyone who takes out the loan can come into our stores and buy food, the microlight loans are time limited only for a couple of weeks.”

“We don’t think this is a solution to the cost of living crisis, but an innovative collaboration and hopefully something that will help.”

Managing Director for Iceland, Richard Walker

Richard said: “Firstly, we are keen to make the loans interest free, we take that element out of it.”

“Secondly, we haven’t gone into this lightly, we have been investigating the micro loan market since the start of 2020 and investigating the right partner and with Fair For You, the lending provider, we’ve really found that.”

The Iceland boss said: “We’ve done 18 months of pilots in north Wales, in Yorkshire, in London, in some of the most deprived communities in the UK and actually we found that people’s reliance on food banks who take out these loans is reduced by 90% and 72% of people can afford things like rent and council tax.”

He said: “Actually people are eating better, It’s improving their mental health, their credit scores, so I’m really comfortable and confident that this is a responsible way to lend will be of real help to many of our customers.”

There is a cap in terms of the total amount Fair For You loan out which is £100 pounds, and people can apply for up to six loans in a year.

Richard said it is “carefully managed and monitored, there is a vetting process, which is quite thorough, and Fair For You will only loan money to ultimately to people who can afford it.”

He added: “In our pilots, which helped over 5000 families, over 60% of them said that they were able to get this loan where they were rejected elsewhere, that’s a really important point because this is a lifeline for many families just trying to make ends meet at the moment.”

Anyone can apply for the scheme and, if successful, credit can be used both in-store and online using the preloaded card.

Successful applicants receive a £100 credit limit and, on joining the programme, which is called Iceland Food Club, can load an initial top-up of £25 to £75 on to their cards.

More here: https://www.fairforyou.co.uk/food-club-card