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Nine UK banks launch fee-free accounts | Nine UK banks launch fee-free accounts |
(35 minutes later) | |
Nine High Street banks and building societies in the UK are to launch basic bank accounts which will not charge a fee for missed payments. | Nine High Street banks and building societies in the UK are to launch basic bank accounts which will not charge a fee for missed payments. |
The new accounts will be available from 1 January to people who fail to qualify for a full current account. | The new accounts will be available from 1 January to people who fail to qualify for a full current account. |
It follows an agreement between the Treasury and the industry in December last year. | It follows an agreement between the Treasury and the industry in December last year. |
Nine million basic account holders will now not be charged for missing a direct debit payment, or a standing order. | Nine million basic account holders will now not be charged for missing a direct debit payment, or a standing order. |
Previously they might have paid up to £35 per failed payment, sometimes pushing them into an overdraft, so increasing the charges further. | Previously they might have paid up to £35 per failed payment, sometimes pushing them into an overdraft, so increasing the charges further. |
"One bank charges £150 a quarter, and such costs can be make or break for some people," said Kevin Mountford, head of banking with Moneysupermarket.com. | "One bank charges £150 a quarter, and such costs can be make or break for some people," said Kevin Mountford, head of banking with Moneysupermarket.com. |
"It will be a good thing if some of these extortionate costs are eradicated." | "It will be a good thing if some of these extortionate costs are eradicated." |
'Significant progress' | 'Significant progress' |
Some banks already do not charge such fees, but the agreement will mean a universal standard across the industry. | |
Barclays, Santander, NatWest, RBS, HSBC, Lloyds Banking Group, TSB, the Co-operative Bank and Nationwide Building Society are among those that will offer deals under the agreement, the Treasury said. | |
Users of the new accounts will also qualify for a debit card, which they can use to shop online, or at cash points. | Users of the new accounts will also qualify for a debit card, which they can use to shop online, or at cash points. |
But they will not be able to run up an overdraft. | But they will not be able to run up an overdraft. |
However, around two million people in the UK still do not have a bank account at all, according to a report by the Financial Inclusion Commission, published in March 2015. | However, around two million people in the UK still do not have a bank account at all, according to a report by the Financial Inclusion Commission, published in March 2015. |
It said those without an account faced paying an extra £1,300 a year for financial services. But the industry argued that the situation was improving. | It said those without an account faced paying an extra £1,300 a year for financial services. But the industry argued that the situation was improving. |
"These basic bank accounts build on the significant progress made by the industry on financial inclusion in recent years," said Anthony Browne, the chief executive of the British Banking Association. | "These basic bank accounts build on the significant progress made by the industry on financial inclusion in recent years," said Anthony Browne, the chief executive of the British Banking Association. |
"More people than ever before can now access banking services." | "More people than ever before can now access banking services." |
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