Nationwide, Lloyds, HSBC and 6 other banks to improve accounts in three key ways
Nine UK banks have agreed to improve basic bank accounts across the country in three major ways.
It comes after an investigation from the Financial Conduct Authority (FCA) - yep, the same guys pushing the £829 car finance repayment scheme - resulted in poor mystery shopper experiences.
The investigation, publicised on Tuesday (7 July), found that some of the most vulnerable customers weren't being protected when it came to offering basic bank accounts.
"Nine of the biggest UK banks and building societies are legally mandated to offer basic bank accounts. They exist to serve people who may not otherwise be able to access standard current accounts; providing access to essential services with no fees and no overdraft," the FCA said.
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The mystery shopper exercise results in a third of experiences being poor or very poor, with the basic accounts not always offered to customers who may benefit from them most.
This included people facing financial hardship or without standard identification, and especially those with no fixed address. Instead, some customers were pushed towards online applications which did not suit their circumstances.
As a result, the banks and building societies have agreed to individual improvement plans.
The banks that legally have to provide these basic accounts are Barclays UK, the Co-operative Bank, HSBC UK, Lloyds Banking Group (including Halifax and Bank of Scotland brands), Nationwide Building Society, NatWest Group (including RBS and Ulster Bank brands), Santander UK, TSB and Virgin Money UK (brand of Nationwide Building Society).
Working with UK Finance, all banks have agreed to the following three commitments:
- Provide the right account for customers, first time, with clear communication and minimal friction.
- Make it straightforward for customers without standard ID or a fixed address to open an account.
- Spot vulnerability early and offer accessible alternatives to online-only journeys.
Emad Aladhal, director of retail banking at the FCA, said: "Progress has been made with over 97 percent of UK adults having a current account, but our latest work shows that all too often banking firms’ engagement with customers still needs improvement.
"Bank accounts are important for financial inclusion, and this is about making sure the very people who could benefit from basic bank accounts are not missing out.
"That’s why the biggest banks have now committed to improving how they are offered – and we’ll be holding them to account to make sure change happens."
Peter Tyler, director of personal banking at UK Finance, said: "A basic bank account can be an important first step towards financial independence, and while most customers who hold one have positive experiences, we recognise that more can be done to ensure consistently good outcomes for everyone.
"That is why UK Finance and our members are committed to raising industry standards and expanding access."
The announcement comes on the same day MPs said the Government must act on student loan plans that would result in more money on your payslip.
Parliament's Treasury Select Committee found that plans to freeze the Plan 2 student loan repayment plan at at £29,385 for three years from April 2027 would be inherently wrong, with a 'moral obligation' to u-turn on this.
A u-turn would result in less money taken from your wage for every £1 earned over the current threshold, given the threshold would rise in line with costs like food, drink, and energy bills.
Tom Earnshaw