While more than six million Britons have ‘basic functionality’ bank accounts, the latest figures from BBA (Basic Bank Accounts) show that financial inclusion figures are improving.
An increasing number of those without access to higher functionality banking are now either switching to a new account or upgrading their existing one – the first quarter of the year saw an additional 164,604 opened and 31,334 basic account holders upgraded to one with more freedom and features.
Some people are refused a fully inclusive bank account for various reasons, such as banks thinking they might be at a high risk of becoming overdrawn. Basic accounts are offered instead, which allow payments to be made directly into the account (such as pensions or benefits) and sometimes allow direct debits to be set up, but do not have overdrafts or cheque books.
Since Universal Banking was set up in 2003 – free, introductory accounts that could be accessed through Post Offices – 2.4 million new accounts have been opened and more than 250,000 upgraded. BBA’s research shows that more than half of these account holders had no previous banking record.
Angela Knight CBE, chief executive of the BBA, said: “Banks continue to welcome customers and to offer a wide range of accounts to suit everyone. The number of basic bank accounts continues to grow and we are seeing significant numbers of new accounts opened. When people have built up a banking relationship they often upgrade to accounts with more features.”
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