May 1, 2019 8:45 am Written by

How Not Having a Bank Account Can Cost You

How Not Having a Bank Account Can Cost You

Last year the use of credit and debit cards overtook the use of cash for purchases, which was a huge signal, we are moving towards a cashless society.

Which brings up a variety of topics and questions to be raised.

One such question is if we do become a fully cashless society, then do we need ATM’s or cashpoints any longer?

In addition, by becoming cashless, how will banks and banking change?

One of the foundations of a cashless society is being able to make payments and purchases without the use of cash. This means you need a debit card or credit card, or some other means, such as a fob, mobile application, some way to make payment, without reaching into your wallet or purse and pulling out sordid cash.

This would mean you would require a bank account of some kind; to have wages or income paid into it, and also you to draw out payments/money to pay.

While it may be difficult to believe, not everyone has a bank account.

We may need a bank account, but over 1 million people in the UK do not have a bank account, and many have been “blocked” from having an account.

Bankruptcy and Bank Accounts

When someone is declared bankrupt, the Official Receiver can and usually will notify the bankrupt’s bank, and the bank will freeze, or possibly close the bank account.

This makes paying bills and financial life even more difficult, as if being bankrupt was not difficult enough.

The reason(s) why a bank may close the account can be for a variety of things:

* The person going bankrupt owed the bank money.

* The bankrupt had a Current Account, with access to credit, maybe in the form of an overdraft.

* The OR needs to verify the account is just a basic account.

Banks were also concerned about being “linked” to a bankrupt, and there were concerns and rule sin banking regarding this; even if no such relationship existed.

The laws and rules were changed, and a person in bankruptcy is allowed a basic account. However, they may wish to open that account prior to going bankrupt to insure no disruption of financial services, such as wages being paid in, and bills being paid out.

Once a bankruptcy has been discharged, opening a bank account should not be an issue, although you may not immediately be able to receive a current account.

So technically, even someone who has gone bankrupt, can get a basic account.

So Why Would Someone Not Have a Bank Account?

According to a new report there are in excess of 1 million people who cannot access a bank account. Many due to credit issues, but more often than not, it is they do not have sufficient ID, or could not show documentation to prove their address.

All of which is needed to open a bank account.

UK Finance, who represent the UK banking industry said, “The banking industry is committed to ensuring banking is accessible to all. There are over seven million basic bank accounts in the UK, helping customers across the country access vital banking services.

And not having a bank account only gets worse, as it can cost someone over £400 more a year for basic services and utilities.

Many Internet, gas and electric providers offer discounts if you set-up a direct debit to pay your monthly bills. Without this direct debit and a bank account, you will pay more for their services and subscriptions.

Even mobile phone carriers offer better deals to those with a bank account.

And there are many banks across the country that offer free basic accounts, however you will need proper identity and proof of residence.

So not having a bank account not only can be costly, but it may become more difficult in the future to use cash as we move further away from it.

Leave a Reply

Your email address will not be published. Required fields are marked *