Basic bank accounts have been available in the UK for over a decade, aimed at supporting financial inclusion for those without a bank account. Previous industry agreements on basic bank accounts were not prescriptive, but established that basic bank accounts should not charge the customer for everyday transactions, and should not be able to go overdrawn.
Following extensive negotiations with the banking industry, in December 2014 the coalition government announced a new voluntary agreement (‘the 2014 agreement’) with the 9 largest PCA providers in the UK to improve basic bank accounts. The participants were: Barclays; Clydesdale and Yorkshire Bank; Co-operative Bank; HSBC; Lloyds Banking Group (including Halifax and Bank of Scotland brands); Nationwide; Royal Bank of Scotland (including NatWest and Ulster Bank brands); Santander; TSB.
Since the beginning of 2016, all 9 participating institutions have offered basic bank accounts that are fee-free for standard operations, including a failed payment, removing the risk that customers run up unintended overdrafts. Basic bank account customers are able to use the same services (e.g. ATM and Post Office counter access) as the institution’s other personal current account customers.
The 2014 agreement included a commitment by participating institutions to provide data to the Treasury on basic bank accounts and personal current accounts, and a commitment by the Treasury to publish information on basic bank account market share. The data in this publication fulfils this commitment. The data covers the period 1 January to 30 June 2016.