The basic financial needs of the poorest people are still not being met despite the introduction of ‘no-frills’ bank accounts five years ago, according to research out today.
The study, produced by the National Consumer Council (NCC), an organisation representing consumers, and social and economic research consultancy Polis finds that the poor continue to rely on high-cost borrowing.
Almost six million basic bank accounts have been opened but around half of people on low incomes still prefer to manage their money in cash because the accounts don’t meet their needs.
The research also finds that people with bank accounts are more likely to lose control of their finances and to be in arrears with their household bills than those without them.
The NCC has called for basic bank accounts to be made more flexible by offering services such as weekly direct debits, to fit in with low-income budgeting cycles, and a small free overdraft.
Claire Whyley, the NCC’s deputy head of policy, said. “There is a mismatch between the needs of the poorest to keep close track of their income and spending and to avoid debt, and existing bank account design which doesn’t help them achieve this.”
Independent and Affordable from: www.ncc.org.uk/moneymatters/affordable
