Basic bank accounts breeding "confidence"

15 March 2006
Basic bank accounts are increasing people's confidence in handling their financial affairs, according to new research.

A survey carried out for the British Banker's Association (BBA) found that over thee quarters (77 per cent) of consumers were more confident after opening one of the very simplest types of bank account.

Basic bank accounts were introduced in 2003 to prevent people from being unfairly excluded if they don't qualify for standard current accounts, for example if they have previously been blacklisted because of a debt problem.

With a basic bank account they will have the chance to improve their credit rating and personal finance management skills, possibly migrating to a standard account at some point in the future.

In the meantime they will be able to set up payments by direct debit, pay in pensions and any benefits and access their money with a card.

However, they will also have the security that they cannot go overdrawn and rack up even more debts.

Earlier this year Citizen's Advice accused banks of failing to publicise basic bank accounts in branches, but the BBA's survey suggests a different story.

A decisive 87 per cent of respondents said they were satisfied with their account's features and 91 per cent had faith in their bank's handling of their account.

Ian Mullen, chief executive of the BBA, said: "Access to banking services is the lynch pin to financial inclusion and this research shows that the features of the basic bank account closely meet people's needs."

To read more about basic bank accounts, click here.

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