Reducing financial exclusion.
Many bankers would privately admit that people with few assets or low incomes make less attractive customers than their better-heeled neighbours.
Understandable? Yes but unhelpful to those who find it hard to make ends meet.
Banks have provided basic accounts for years. Unfortunately they often had strings attached and weren’t suitable for those who needed them most.
The good news is that in January our large and medium-sized banks agreed* with ministers to offer a new formula.
The aim is a basic account for people a) without an account, b) who need to switch banks, and c) are in financial difficulty and need an additional account.
This summer at Citizens Advice Reigate & Banstead we’re working with CA colleagues across the country to find out how the new service is going. If it works it will help reduce the financial exclusion that affects too many people. We’ll be sharing our local and national findings soon.
The agreement is part of the government’s implementation of the EU Payment Accounts Directive. In due course changes in banking law will ensure compliance with the requirement that everyone have legal right of access to a basic bank account.