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London Capital Credit Union

London Capital Credit Union Deferred Shares

£10,000 minimum

A deferred share is not a conventional financial investment, but rather a dividend paying social investment designed to bolster the regulatory capital of the credit union and enable them  to increase lending activity to members who need it. You should not invest in deferred shares if you are purely seeking a financial return. An investment in deferred shares is more akin to a permanent social investment or donation, restricted in use to provide capital in order to allow the credit union to continue to increase its levels of lending to those who need it most.

Deferred shares risks

Deferred shares are a special type of share that a Credit Union can issue.  Defferre shares usually carry the features and behaviours set out below. Direct investment in deferred shares can be high risk and is very different to investment in deposit accounts or other savings products. In particular, you should note that:

(a) the entire amount you pay for the deferred share is at risk;

(b) the sum you pay is only repayable to you in limited circumstances, specifically if:

i. the credit union has obtained specific regulatory permission to make the repayment; or

ii. the credit union is wound up, and there are funds remaining after all creditors, including savers and holders of subordinated debt, have been repaid;

(c) the sum you pay for deferred shares is not covered by the Financial Services Compensation Scheme;

(d) a deferred share may only be sold to a member of the same credit union and may be difficult to sell on (NB London Capital Credit Union's shares are not transferrable); and

(e) investing more than 10% of your savings or net investment portfolio in deferred shares issued by a credit union, credit union subordinated debt and mutual society shares is unlikely to be in your best interests

Minimum raise for offer to proceed

No minimum

Shares Allotted

1,000,000 of £1 shares will be allotted subject to a minimum purchase of 1,000 shares.

Financial return

Deferred shares will be non-interest bearing. The effective interest paid to holders of deferred shares, by way of dividend, will be at the discretion of the membership as a whole and is determined by the levels of annual surplus. The Board proposes to pay the same dividend to deferred shareholders as paid to ordinary members. For information, London Captial Credit Union have paid the following dividend in recent years:

2013 - 2%

2014 - 1.2%

2015 - 0.75%

2016 - 0.75%

2017 - 0% *

2018 - 0% *

* continued trading surplus was all added to reserves to strengthen capital asset ratio

Social return

Over the next 5 years London Capital Credit Union forecast a financial benefit to members, and the wider community, in excess of £129 million.

How much can you invest?

You should not invest more than you can afford to lose. Shares are issued at a fixed price of £1 each. London Captial Credit Union cannot accept an investment of more than £180,000 or less than £10,000 in deferred shares from any single person or organisation. This should be considered a social investment rather than a traditional financial investment. You should be assured that your investment will bring lasting improvements to the lives of many people living and working in some of the poorest areas of the capital.

Minimum investment amount


Maximum investment amount


Getting your money back

A deferred share

  • is essentially perpetual and can only be redeemed/withdrawn in the very limited circumstances set out at section 31A of the Credit Unions Act 1975 (with the consent of the regulator or, if the credit union is wound up or dissolved, when all other creditors have been paid, including non-deferred shareholders);
  • ranks below all other liabilities in the event of insolvency of the credit union which issues it;
  • carries, for its holder, a right to exercise a single vote in a general meeting of the credit union irrespective of how many deferred and/or non-deferred shares the holder owns;

These deferred shares are not transferable between members of the credit union - they are highly illquid.

How secure is your money?

Before considering investing you should be aware that:

  • All of the capital invested is at risk;
  • Income or distribution payments are entirely discretionary;
  • The instrument is perpetual and will probably be illiquid;
  • Investing more than 10% of the net investable portfolio in this type of instrument is unlikely to be in your best interests:

Note that deferred share investments are not protected by the Financial Services Compensation Scheme.


Only members of the credit union, corporate or individual, can invest in deferred shares. Only companies or individuals who are classified by the Financial Conduct Authority as professional and eligible counterparty clients, certified restricted retail investors, self-certified sophisticated investors or certified high net worth investors can invest. This is because deferred shares are not suitable for ordinary retail investors. Corporate bodies must have some kind of physical base within London Capital Credit Union's trading area of the City of London, or as set out below. Individuals can also purchase deferred shares if they live OR work in:

  • Barnet
  • Brent
  • Camden
  • City of London
  • Enfield
  • Hackney
  • Haringey
  • Islington
  • Waltham Forest

or comply with one of the other membership criteria, such as being a member of The Co-op in London or the South East Region. A full list of London Capital Credit Union's membership criteria can be found at the LCCU website.

Applied for to date, of
£300,000 target

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