Millions of people rely on a bank account to receive wages, benefits and pay everyday bills. But according to the UK’s financial regulator, some of the people who need basic banking services the most have been struggling to access them.
The Financial Conduct Authority (FCA) has told nine major banks and building societies to improve how they offer basic bank accounts after finding too many vulnerable customers were being let down.
What is a basic bank account?
A basic bank account is designed for people who may be unable to open or use a standard current account.
Unlike most current accounts, basic bank accounts:
- Have no monthly fee
- Do not offer an overdraft
- Allow you to receive wages and benefits
- Let you make payments by debit card,
- Direct Debit and standing order.
They are available from a range of major UK banks and building societies and can often be opened by people with poor credit histories, those who are bankrupt or people on formal debt repayment plans.
More than four million people in the UK already have one.
What has the FCA said?
The FCA carried out a mystery shopping exercise involving almost 300 visits and calls to banks. The results showed that many customers were not being given the right information about basic bank accounts.
Some of the most common problems included:
- Customers not being told that a basic bank account was available
- People being directed towards unsuitable online applications instead
- Difficulties for people without a fixed address or standard identification
- Poor support for customers in vulnerable circumstances.
Overall, around one in three experiences were rated as poor or very poor.
For many people, particularly those facing financial hardship or homelessness, this can create another barrier to accessing essential financial services.
What will happen now?
Following the FCA’s review, the banks involved have agreed to improve how they support customers.
They have committed to:
- Helping customers open the right type of account the first time
- Making it easier for people without standard identification or a permanent address to open an account
- Offering alternatives for customers who cannot complete online applications
- Improving support for vulnerable customers.
The changes are intended to make basic bank accounts more accessible for those who need them most.
What are your rights?
Having a bank account is something many people take for granted. Without one, it can be much harder to receive wages, claim benefits, pay household bills or build financial stability. The FCA says banks have an important role to play in ensuring people are not excluded from everyday banking because of their personal circumstances.
If you’re refused a standard current account, or think one may not be suitable for your circumstances, it’s worth asking whether you’re eligible for a basic bank account.
Many people assume they won’t qualify because of a poor credit history or previous financial difficulties, but these accounts are designed to help people who may otherwise struggle to access everyday banking services.
If you believe a bank has treated you unfairly or failed to consider your circumstances properly, you can make a complaint through the bank’s complaints process. If the issue isn’t resolved, you may be able to take your complaint to the Financial Ombudsman Service.
Standing up for fair treatment
Issues like this highlight the importance of businesses treating customers fairly, particularly those in vulnerable situations.
At Join the Claim, we help consumers understand their rights and explain when unfair treatment could lead to legal action or compensation. In this case, the FCA’s review is about improving banking standards rather than compensation, but it reinforces the importance of banks treating every customer fairly.
