Nine major banks and building societies in the UK will be offering new “no frills” fee-free basic bank accounts which won’t charge for missed payments.
The new accounts will be available from 1 January for consumers who don’t already have a bank account, or those who are ineligible for a standard current account.
The announcement comes following an agreement made between the Treasury and the banking industry last year to establish basic ‘charge-free’ bank accounts – even when direct debits or standing orders fail.
Nine million basic account holders in the UK, who might have previously had to pay fees of up to £35 per failed payment, will not be charged for missing a direct debit payment, or a standing order.
The Treasury said that Barclays, Santander, NatWest, RBS, HSBC, Lloyds Banking Group, TSB, the Co-operative Bank and Nationwide Building Society are among those that will offer the new basic bank accounts.
According to a report by the Financial Inclusion Commission, there are over two million people in the UK who do not have a bank account at all.
Economic Secretary Harriett Baldwin said: “I’m delighted that for the first time, truly fee-free basic bank accounts will be available to anyone who doesn’t already have an account, or isn’t able to use their existing account due to financial difficulty.
“This is a key step forward in ensuring that our banking industry works for everyone.”
Sian Williams, head of the Financial Health Exchange at Toynbee Hall, said: “We know from our work with the financially excluded that a transactional bank account is essential for getting and sustaining a job and a home, as well as for accessing opportunities to study and take part in wider society.
“We therefore fully support the new basic bank account initiative to ensure everyone has access to a bank account.”
Banks/building societies to offer free basic accounts include:
Barclays – Barclays Basic Current Account
Santander – Basic Current Account
NatWest – Foundation Account
Ulster Bank – Foundation Account
Royal Bank of Scotland (Scotland) – Foundation Account
RBS England and Wales – Basic Account
HSBC – Basic Bank Account
Nationwide – FlexBasic
Co-operative Bank – Cashminder
Lloyds/ Halifax/ Bank of Scotland – Basic Account
TSB – Cash Account
Yorkshire and Clydesdale Banks – Readycash Account
