Politicians have united to support a service which could save hard-pressed families from the jaws of high interest loan sharks or pay-day lenders.

MPs Edward Davey and Zac Goldsmith, and Kingston Council leader Derek Osbourne signed a letter of support for SurreySaves, a new credit union.

The credit union has made a bid to the Financial Services Authority to set up in Kingston.

It has been estimated the scheme would save more than £1m in interest payments a year.

Project co-ordinator Michael Green said: “There’s massive amounts of debt run up by individuals and families based on what now seems to be an optimistic assumption of continued economic growth.

“There’s a million personal stories.

“When people are in debt they tend to find the number of routes they can access funds or credit diminishes rather quickly and rapidly.

“It will mean those families that are excluded at the moment due to circumstances of lack of employment or due to the credit crunch will have the opportunity to open bank accounts, to save, learn how to operate budgeting and the potential to access loan capital.”

Edward Davey, Kingston and Surbiton MP, said: “This has taken a lot of hard work and a long time coming but the benefits it will bring to the people of Kingston will be considerable.”

Zac Goldsmith, MP for Richmond Park, said: “I’m very pleased to support these proposals, and look forward to the introduction of a reliable, low cost source of local financing for local people.”

Councillor Derek Osbourne, leader of Kingston Council, said: “We warmly welcome the application to extend SurreySaves into Kingston.”

Hilary Garner, the chief executive of Kingston Voluntary Action, said: “It is a real example of the voluntary sector in action.”

Members would pay bills through a Jam Jar account at the Post Office allowing them access to discount schemes on gas and electricity.

Since it began in Surrey two months ago, SurreySaves says it has found most loan requests are for home improvements like new kitchens, bathrooms and insulation.