For the first time they will be truly fee-free, helping people to manage their money without fear of running up an overdraft.
The recent announcement by the Government follows the December 2014 agreement between the government and the banking industry to establish new basic bank accounts that will end bank charges if a direct debit or standing order fails. In some cases, charges had been as high as £35 per failed item, and uncapped, meaning charges could accumulate to hundreds of pounds over time and drive people into serious debt. The changes will remove the risk that basic bank account customers will be forced into overdraft because of these fees and charges.
Basic bank account customers will now also be offered services on the same terms as other personal current accounts that the banks provide, including access to all the standard over-the-counter services at bank branches and at the Post Office, and access to the entire ATM network. Existing basic bank account customers should ask their bank whether they could still be charged if a direct debit or standing order fails, and whether they are eligible for a new basic bank account. There are an estimated nine million basic bank accounts in the UK.
The banks and building societies that have signed up to offer a basic bank account from 1st January 2016 with their corresponding bank account products, are:
- Barclays – Barclays Basic Current Account
- Santander – Basic Current Account
- NatWest – Foundation Account
- Ulster Bank (Northern Ireland) – Foundation Account
- The Royal Bank of Scotland (Scotland) – Foundation Account
- RBS England & Wales – Basic Account
- HSBC – Basic Bank Account
- Nationwide – FlexBasic
- Co-operative Bank – CashminderLloyds Banking Group (including Halifax and Bank of Scotland brands) – Basic Account
- TSB – Cash Account
- National Australia Bank Group (including Yorkshire Bank and Clydesdale brands) – Readycash Account
Sources: www.gov.uk (Published article – Janauary 2016)