Citizens Advice Scotland has welcomed the news that the UK’s nine biggest banks have agreed to provide free basic bank accounts by the end of 2015.
Many people have no bank account because these banks have in the past refused to accept them, due to problems like poor credit history or a previous bankruptcy. But having no bank account makes life very difficult for people, impacting on the receipt of benefits, wages and employment opportunities. Our research has even found many people are unable to pursue employment opportunities because of a lack of bank account to have their wages paid into. Access to a bank account also makes it easier for people to access affordable credit, housing, and lower utility payments – which leads to greater financial inclusion overall.
CAS spokesman Fraser Sutherland says,
“Having no bank account makes it very difficult for people to manage their money. And far too many Scots are in this position. So of course we welcome this announcement. It has been a long time coming. However, it is unfortunate that it has taken the threat of EU directives, due to come into effect in 2016, to force the industry to take these steps.
“We are pleased that this agreement will see a range of accounts now available that will have no hidden fees and charges, and will be open to those who have faced financial problems in the past. Just having a simple bank account will be a real lifeline to consumers who are currently turned away at the door by the major players in high street banking.”
CAS has been campaigning on this issue for years. Our most detailed report, Banking on the Basics, can be read at /publications/banking-basics. This was published in 2010, but its findings and case studies are still relevant in showing the problems faced by people without bank accounts. This report found that one in 10 Scots responding to our survey did not have a bank account, increasing to one in 5 people who live in the 15% most deprived areas of Scotland.