Deeside-based frozen food giant Iceland have announced they are rolling out an interest free loan scheme following a successful trial. 

As the cost of living crisis increases across the UK, Iceland has partnered with charity-owned lender Fair For You to help support customers.

The scheme will provide an affordable, flexible credit solution enabling people to avoid food poverty, particularly during school holiday periods.

Iceland Food Club is part of the retailer’s ‘Doing it right: right now’ response to the cost of living crisis.

READ MORE: Iceland boss urges businesses to ‘step up’ to help customers amid cost-of-living concerns

Prior to the loan scheme announcement, Richard Walker, managing director of Iceland Foods, said: “More than ever, people are struggling to purchase much needed everyday items during this relentless cost of living crisis, and fresh thinking is required by business and government to find workable solutions."

Mr Walker, who lives in the North-West with his wife and children, took over from his father as MD of Iceland Food Groups in 2018 following three years in the role for Iceland’s sister company The Food Warehouse.

In his role as managing director at supermarket chain Iceland, which launched in Oswestry in the 1970s, has introduced some innovative changes in relation to sustainability however his major concern for the moment is the cost of living.   

The company has implemented several schemes to ease the strain on families including a 10 per cent discount for those over 60’s on Tuesdays. 

According to Mr Walker, the scheme has been “massively successful” and nearly 800,000 customers have redeemed it so far.  

The new scheme’s pilot has had a significant social impact and has been shortlisted for a Global Good Award, and the Iceland Food Club will now offer ethical credit to customers across all UK stores and online.

The Iceland Food Club originated from a task force of Iceland colleagues dedicated to finding a way to support children at risk of hunger, particularly when those on free school meals were at extra risk during school holidays.

READ MORE: North Wales pensioners in need to receive £30 Iceland voucher

The initiative has been supported by HM Treasury, NESTA and Esmée Fairbairn Foundation.

What is the Iceland Food Club?

The Iceland Food Club will see micro loans being made available to those in need on a pre-loaded card.

Repayments are set at £10 a week and customers are able to choose what day of the week they make the repayments.

While during the pilot phase, customers paid interest on loans, Iceland has decided to invest in making all loans completely interest-free for the national roll-out, helping even more people manage the rising cost of living.

Customers may only take out one loan at a time, during six windows through the year which coincides with school holidays.

Limiting loans to these periods ensures customers only use them to smooth out incomes, rather than relying on them year-round.

By providing micro loans of £25-£100 with a minimal amount of interest to more than 5,000 customers during the Food Club’s pilot phase, findings from the Centre for Responsible Credit showed:

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92% of customers using food banks previously had stopped or reduced their food bank use

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71% of customers said they were less likely to fall behind on rent, council tax or other bills

71% of customers said they were better able to pay for food and other essentials

A reduction of more than 80% in the number of customers using loan sharks

65% of customers said their diet had improved

57% of customers felt less ‘stressed, anxious or depressed’ about their finances

Richard Walker, Managing Director of Iceland Foods, said: “At Iceland, as part of our Doing it right: right now we’re constantly exploring new ways to help our customers with innovative solutions that deliver real impact.

“With Fair for You, we have rolled out Iceland Food Club to offer our customers even more support, helping them manage essential spending on their own terms. To those striving to worry less about how they will afford essential goods, this ethical credit scheme delivers real help when most needed and I believe it will make a valuable contribution to breaking the cycle of food poverty in this country.”

How to apply for Iceland’s Food Club?

Anyone can apply for the scheme, and, if successful, credit can be used in-store and online using a preloaded card, allowing customers to stock while spreading the costs.

Successful applicants receive a £100 credit limit, and on joining Food Club can load an initial top-up of £25–£75 onto their cards. They will receive a preloaded card within 5-7 business days. It is interest-free.

For more information about the Iceland Food Club visit the website here.

Who is eligible to apply? 

New customers are eligible, and the scheme is subject to availability. 

An eligibility checker, which will not leave a footprint on your credit file, is available online.

Those on benefits are eligible to apply, provided you have a stable, regular income and a bank account you can make your repayments from.

Shoppers can apply online and may receive a decision within an hour during business hours.

If successful, you will receive a preloaded card within five to seven business days, and you can then use the balance on your card to shop in store or online at Iceland.