Rise of the ‘no frills’ account

MORE than 900,000 no frills basic bank accounts were opened in the year to June, bringing the total number of the fee-free accounts open to nearly five million, Government figures show.

Since September 2016, the UK’s nine largest banks have been legally required to offer fee-free basic bank accounts.

These accounts give people somewhere to have their income paid in, such as wages and any benefits, as well as a place from which to pay their bills, but they tend not to come with added features such as an overdraft.

The accounts improve financial inclusion for those who do not have a current account or who might struggle to open a standard account, perhaps because they have a poor credit history.

The nine banking groups offering basic bank accounts are Barclays, Clydesdale and Yorkshire Bank, Co-operative Bank, HSBC, Lloyds Banking Group (including Halifax and Bank of Scotland brands), Nationwide Building Society, RBS (including NatWest and Ulster Bank brands), Santander and TSB.

Nationwide and Lloyds Banking Group opened the most feefree basic bank accounts between July 2016 and June 2017.

In total there were just under eight million basic bank accounts open in June including nearly five million accounts consistent with the new fee-free standards as well as other basic bank accounts that were consistent with previous industry agreements.