Basic bank accounts and financial inclusion - final quarter of 2008

[Legal Beagles]

Latest figures from the BBA show that another 142,000 post office accessible accounts were opened in the final quarter of last year and 19,000 existing accounts upgraded.

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Re: Basic bank accounts and financial inclusion - final quarter of 2008

Basic bank accounts and financial inclusion - final quarter of 2008


17/03/2009

Latest figures from the BBA show that another 142,000 post office accessible accounts were opened in the final quarter of last year and 19,000 existing accounts upgraded.

• Since April 2003, nearly 3.5 million post office accessible accounts have been opened (half of which are estimated to be for customers with no previous banking relationship (http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=557&a=6928) and 440,000 have been upgraded to other accounts.

• There are also 3.5 million other basic functionality accounts, accessible through branches, cash machines and mobile branch facilities. Of these accounts, a net total of 794,000 have been opened and 214,000 upgraded in the past five years.

David Dooks, BBA statistics director, said:
“Another 600,000 basic bank accounts being opened in 2008 demonstrates their continuing significance for the personal sector. For people with no previous banking relationship, there are now nearly 8 million ‘basic-function’ accounts, providing a suitable first step to accessing cash and payment services. Banks are committed to working with government and other stakeholders to improve financial inclusion through these types of accounts.”
For further information, please contact:
Press Office (020 7216 8989 )
Out of Hours (020 7216 8888 )

Notes to Editors:

1. There are two types of basic banking accounts; those operated through branches and ATMs, and those that can also be operated through post office counters. HM Treasury monitoring of progress towards the shared financial inclusion goal was based on the latter type of account.
2. In total, there are 7.7 million accounts in operation, designed for people who might not meet the banks’ criteria for opening a standard current account or who want to ensure that they cannot overdraw their account. Account features typically include the ability for payments, eg pensions and benefits, to be credited directly to the account, for withdrawals by plastic card through cash machines and the facility to pay bills by direct debit, though they do not offer overdraft facilities nor, for example, a cheque book. The accounts fall between two types:
a. Post-office accessible accounts

Historically, around 750,000 ‘basic-functionality’ bank accounts could be accessed at the post office but, from the launch of universal banking in April 2003, direct payment into bank accounts or Post Office Card Accounts became the normal method of payment for government benefits and tax credits. From that point sixteen banks have offered specific accounts that can be accessed through Post Office counters. Full details of these are published by the Financial Services Authority (FSA) both on their website and in their leaflet “Basic bank accounts - your questions answered”. Monitoring these accounts formed the basis of measuring progress towards the shared financial inclusion goal with HM Treasury of making significant progress towards reducing the number of adults in unbanked households by half, based on a figure of 2.8 million in April 2003. The numbers of accounts opened, net of closures, during each quarter were:

Jan-Mar

Apr-Jun

Jul-Sep

Oct-Dec

2003

111,550

148,044

156,824

2004

153,746

149,449

187,874

184,608

2005

169,249

154,742

149,990

141,989

2006

130,556

127,390

140,202

151,518

2007

164,604

151,534

167,511

152,298

2008

342,038*

145,124

153,790

142,153

* In 2008 Q1, Halifax additionally opened 197,212 accounts for customers previously holding non‑post office accessible accounts; furthermore, from 2008 Q1 onwards, openings include those offered by Nationwide Building Society to provide a full picture of account take-up.
Since April 2003, 438,869 accounts have been upgraded to more fully‑featured accounts, though the total number of post-office accessible accounts open still exceeds 4.2 million.
Individual banks/brands offering accounts accessible through Post Office counters are:
Abbey, Alliance & Leicester, Bank of Ireland, Bank of Scotland, Barclays Bank, Clydesdale/Yorkshire Bank, Co-operative Bank, First Trust Bank, Halifax, HSBC Bank, LloydsTSB, Nationwide Building Society, NatWest, Northern Bank, The Royal Bank of Scotland, Ulster Bank.
b. Accounts accessible through branches and ATMs
In the context of ‘social banking’, these accounts were in existence long before the launch of universal banking, with some having been opened in the 1980’s and they operate alongside post‑office accessible accounts. Since April 2003, 213,949 accounts have been upgraded and, although some accounts will typically be closed by banks due to long-term dormancy or inactivity (In line with good practice) or customers migrated to more suitable products, there are 3.5 million of these accounts in existence.

3. Account ‘upgrading’ Basic accounts are regarded as a convenient stepping stone to fuller-featured accounts for people without previous banking relationships. As part of customer relationship management, banks will, when appropriate or on customer request, present options to move from a basic account to other accounts, eg a current account. The term ‘upgrading’ is used in this release to reflect a customer closing a basic account in favour of opening a fuller-featured account with their bank.
4. Data contained in this release may have been re-stated from previous releases as a result of revised or improved data becoming available.

[enaid]

Re: Basic bank accounts and financial inclusion - final quarter of 2008

Since April 2003, nearly 3.5 million post office accessible accounts have been opened (half of which are estimated to be for customers with no previous banking relationship.

The other half are for those who had a banking relationship, which in the end became very much one sided. These people were then advised to get a basic account so they had money to survive on.

[Amethyst]

Re: Basic bank accounts and financial inclusion - final quarter of 2008

Well said :kiss:

[natweststaffmember]

Re: Basic bank accounts and financial inclusion - final quarter of 2008

"Account upgrading".....those were the days. Let's upgrade your account to a bells and whistles account that you will never use the benefits while we cream off the money for the account, that'll be £10+ every month......shhhh! he might do better without it and staff either (a) don't pay for it anyway or (b) get it at a discounted rate(so obviously they would have it---and cancel it when they leave the firm )