Banks criticized over financial inclusion
A total of 2.8 million UK adults do not have a bank account, the equivalent of one in 12 households, according to research released today.
Citizens Advice has criticized banks for failing to meet the needs of vulnerable and would-be customers by refusing to let them open bank accounts or imposing high charges when they do.
A report by the charity has shown those who are turned down for accounts often have to rely on expensive alternatives, such as cheque cashing services, which can plunge them into debt. It said bank charges of up to £39 for a failed direct debit are often triggered by the late payment of benefits or tax credits. And it often takes up to 10 days for a cheque to clear through a basic bank account, rather than the standard three to four working days.
Teresa Perchard, director of policy at Citizens Advice, said: “The issue of access to bank accounts has become all the more urgent with the Government’s announcement that from 2010 it will no longer fund Post Office Card Accounts, which are currently used to pay pensions and benefits to around four million people. At the moment many banks are just paying lip service to financial inclusion.”