Basic bank accounts update

Fee-free basic bank accounts were launched on 1 January 2016. Basic bank accounts are for people who do not have a bank account, are ineligible for a standard current account or who can’t use their existing account due to financial difficulty. These accounts are primarily of interest to those with poor credit ratings who may be unable to pass the credit checks for standard bank accounts.

Basic bank accounts were available prior to 1 January 2016, however, the new accounts meet enhanced standards agreed by the government and industry in late 2014. There are currently 8 million basic bank accounts in the UK and over half of these meet the 2014 agreement standards. Since the 2014 agreement came into force on January 1 2016, nearly half a million basic bank accounts have been opened in the UK.

The basic bank accounts do not offer overdrafts or cheque books, but they are similar to existing bank accounts in many ways and will be suitable for day-to-day transactions. The accounts also provide for counter access on the same terms as other bank customers and also allow for access to ATMs and online services.

Economic Secretary, Simon Kirby said:

'Ensuring consumers have access to the financial services they need is a vital part of our plan to build an economy that works for everyone. That is why I am delighted nearly half a million people have opened fee-free basic bank accounts since January. There is still more to be done and I am determined to work with the industry to boost financial inclusion and make sure people have the resources they need to manage their finances.'

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