A credit union will open in Barton next week as volunteers bid to help estate residents with money woes.

The service is first being showcased on Monday – the day known as “Blue Monday”.

The third Monday of January is said to be the most miserable day of the year as people are hit by overspending at Christmas.

Union volunteers will talk to potential members at St Mary’s Church, Bayswater Road, on Monday and the following Saturday, both from 5pm to 7pm.

People join for £1 and give a £1 deposit to start a saving account and give a minimum of £2.50 a week. 

Interest rates of 26.8 per cent APR, two per cent a month, are offered.

Volunteer Robin Peake said the service offered investors and borrowers “ethical” rates.

He said: “It allows members to borrow at a fairly low rate, a ridiculously low rate compared to pay day lenders.”

The volunteer said members would only have to pay back £102 if borrowing £100 for a month.

But he added: “It gives an opportunity for many people to save money ethically. It is not just open to people on low incomes.”

So far eight volunteers have come forward to help residents access the union.

Mr Peake said the team had hoped to set up a branch of the Oxford Credit Union but legalities meant it was not possible. 

Leaflets advertising the service are set to be delivered to more than 1,800 homes in Barton over the weekend.

The events have been set up with the help of a £500 grant from Barton and Sandhills city councillor Van Coulter.

The Labour councillor said: “For many, the post-Christmas blues are taking hold. Some people under financial pressure might well be considering a pay day loan. But that’s probably the worst thing to do.

“A better alternative is to join the local credit union. Because they are a not-for- profit organisation, the credit union fairly prices its loans.”

Earlier this month, plans were also unveiled to open a credit union in Witney.