Could you survive without your bank account?

By Amanda McSorley amandamcsorley

Did you know that people are more likely to change their partner than their bank? This may come as a surprise to the many people who see the banking industry as public enemy number one, but have you ever thought how your life would work if you did not have a bank account? How would your salary or wages be paid? What about rent, a mortgage or paying the bills?

In the modern world you could, technically, almost cease to exist, but access to even the most basic bank accounts is denied to a large number of people and Citizens Advice fear this problem could get worse.

Every year, advisers see people who either cannot get access to an account at all or who face restrictions in getting to their own money due past financial difficulties or identification requirements.

Last month, Citizens Advice launched a campaign calling for an overhaul in the banking industry’s practices for basic accounts and for everyone to have access irrespective of their financial circumstances.

It is more than a little sad that this campaign is necessary, as Citizens Advice first starting calling for this essential facility 10 years ago.

A decade on, this financial inclusion strategy is in trouble and that’s before the rollout of the new benefit system, Universal Credit, in which payments will be made directly into bank accounts.

But it is not just people on benefits who suffer; anyone on a low income or with a poor credit rating (perhaps because they have not used credit) could be turned away because of widely varying bank criteria.

The reality is that basic bank accounts do not generate huge profits, so some financial institutions pulled away from or ‘hid’ this provision while those who were socially responsible found themselves with a disproportionate share of the market and had to start restricting services or go under.

CAB is urging the banking industry to make basic accounts more widely available with a set of standards on issues such as identification that put all banks on an even playing field before Universal Credit is introduced.

Those facing problems in opening a basic account can get help from the Citizens Advice website, Advice Guide, or Lincoln CAB. An ID Handbook is available from Transact, the national forum for financial inclusion that provides information about many different forms of ID and how to get them.

Amanda McSorley joined the Research and Campaigns Team at Lincoln and District Citizens Advice Bureau in February 2013. She is a former journalist and newspaper editor, with 30 years’ experience of covering the issues that impact people’s lives.