A ‘BANK for the community’ is set to close its doors after going into administration.

Boscombe’s Coastal Credit Union, owned outright by its members, said yesterday they are no longer trading.

A spokesperson said existing members will be fully refunded with cheques issued over the next few days for those with more than £1,000 in the bank. Those with less will receive a money order to cash at the post office.

But the news comes as a ‘devastating’ blow to its customers - many of whom use the service because they have nowhere else to go.

Member Paul Hillman, 47, from Boscombe, said he’d been told his “money was safe” but he was “absolutely gutted” by the news.

“This is a good thing here at Credit Union,” he said. “Establishments like this should not be going under. The powers that be should be stepping in. The chance of people on benefits getting an account somewhere else is slim.”

Mr Hillman - and others - thanked office manager Claire Churchill for her commitment to them over the years since the not-for-profit was launched.

“This whole project has been Claire’s baby; she’s run it and looked after it,” Mr Hillman added.

“Everybody knows she’s been a real pillar of the community.”

Patrick Furlong, 41, of Charminster, said: “A lot of people save up all year but are dependent on this place getting them through Christmas.

“Most people won’t be able to open up a bank account because they don’t have an address. So where are they going to go? I think this is going to be devastating.

“This is a proper part of the community. And now it’s all disappeared overnight. Claire is also some people’s budgeting councillor. If people borrow and can’t pay it back she talks to them to help them. That’s all finished. Credit Union is supposed to be a community project rather than a financial institute.”

The Financial Services Compensation Scheme closed the cooperative’s doors after it was revealed the union was unable to re-pay deposits of more than £1.1m to its approximate 5,200 account holders.

Another unnamed member said: “It feels like they’re pulling up the drawbridge. But [the staff] have formed real relationships with these people. It’s personal.”