1.8 m open first bank accounts

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Re: 1.8 m open first bank accounts

1.8 m open first bank accounts

Friday, 26 Jun 2009 11:43


Some 1.8 million people excluded from banking have set up accounts for the first time in the last six years.

Data released today show a total of 3.6 million post office accessible accounts have been opened since 2003 – with over half opened by people with no previous experience of banking.

Figures from the British Bankers' Association (BBA) show 145,000 Post Office-accessible accounts were opened in the first quarter of 2009 and 26,000 existing accounts were upgraded.

David Dooks, BBA statistics director, said: "For those who had no previous banking relationship, there are now 4.3 million people able to access their basic bank accounts at post offices, while there are a further 3.5 million other ‘basic-function’ accounts, providing a suitable first step to accessing cash and payment services."

However, it is estimated some 1.85 million people still do not have access to a bank account.

BBA chief executive Angela Knight said: "Banks are committed to working with the government and other stakeholders to further improve financial inclusion through the provision of basic accounts.

“Basic accounts provide important banking services for people to manage their finances, particularly for those with no previous banking relationship. Today’s Treasury figures give further evidence that the growth of these accounts has helped to improve financial inclusion in recent years."

It is the government's aim to reduce the number of adults living in households without access to a bank account to 1.42 million.

Currently two per cent of adults are confirmed as not having a bank account.

[Amethyst]

Re: 1.8 m open first bank accounts

Basic bank accounts and financial inclusion first quarter of 2009


26/06/2009

Figures from the BBA show that 145,000 post office‑accessible accounts were opened in the first quarter of the year and 26,000 existing accounts upgraded.

• Over the past 6 years, over 3.6 million post office-accessible accounts have been opened (half of which are estimated to be for customers with no previous banking relationship) and 465,000 have been upgraded to other accounts.
• There are a further 3.5 million other basic functionality accounts, accessible through branches, cash machines and mobile branch facilities. Of these accounts, a net total of 810,000 have been opened and 211,000 upgraded.

David Dooks, BBA statistics director, said:
“It is now 6 years since the industry committed to sharing a goal with government to improve financial inclusion in the UK with the launch of ‘Universal banking’. For those who had no previous banking relationship, there are now 4.3 million people able to access their basic bank accounts at post offices, while there are a further 3.5 million other ‘basic-function’ accounts, providing a suitable first step to accessing cash and payment services. These figures show continuing progress towards the shared goal.”
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 7.8 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. Since April 2003, 465,000 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, 211,100 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.