• About
  • Mortgage Basics
  • $40K Challenge
  • Aunt Doris
  • Grandfather Says
  • Privacy
  • Archives

Len Penzo dot Com

The offbeat personal finance blog for responsible people.

Why Going Back to Basics Pays Financially

By Enero Febrero

Most of us take the fact that we can access a bank account for granted — whether it’s drawing money out, transferring cash that we owe a friend, or paying our bills every month. But what if you’re struggling with your money? It’s not a given that a bank will allow you to have an account with them and, indeed, six million Brits saw applications for accounts with a High Street bank refused during the previous three years.

So, where can you turn if you’re in that position? That’s where basic bank accounts come in, offering a scaled down version of the current account to people who need a helping hand. Not everyone knows about these products, but they can be a highly useful way for people to gain financial security.

What are basic bank accounts?

Basic bank accounts were — as this guide notes — launched in January 2016 and are for people who either don’t have a bank account and are unable to get a current account, or who can’t use their own current account because they’ve fallen into financial difficulties.

They don’t charge any fees, but they don’t offer customers an overdraft facility either. They allow people to pay money into a bank, and in some cases will provide a debit card for purchases.

Users can also take money out or check their balance at a cash machine or “over the counter,” and deposit their wages, benefits, pensions and other checks.

It’s possible to get a basic bank account if you’re going through the process of bankruptcy, or if you have an insolvency measure in place. People in this position will clearly want to work towards getting rid of their debt, and building a better credit history for the future; and access to a basic bank account can be an important part of such a recovery plan.

Need to spread the word

There are almost eight million basic bank accounts open in the UK and most of the big banks now offer them. Despite this, there are those who think that more must be done to promote them further — ensuring that people who are struggling are given the help they need to manage their money effectively and get themselves on a steady footing.

The Guardian described these accounts as the “Cinderella of the financial services world,” saying that they feature none of the advertising campaigns fronted by celebrities and sports stars for the major banks.

It also noted that a House of Lords committee recently called on banks to be “much more proactive,” and it even pointed to cases in which branch staff didn’t know that they existed.

The challenge is to get the banks to do more to push these to customers — especially those who are turned down for a current account — and for the Government and charities to do more to point people in the right direction. Good progress has been made — but it’s clear that more work is needed to encourage people to go back to basics when it comes to their bank account.

Photo Credit: OC Always

2 Comments July 7, 2017

Comments

  1. 1

    Cory @ Growing Dollars From Cents.com says

    Sometimes having a basic bank account is better than having a fancy checking account offered by these popular banks.

    Why?

    Fees!

    Sometimes it’s not worth having all those services when you don’t even need them. Also, even if you don’t use these services you may still be charged fees for just having them.

    If you don’t need all the bells and whistles on a bank account you should think about going basic.

    Reply
  2. 2

    Juhani says

    Basic bank account is what most people need. Does an image of an account influence so much that people are willing to pay for nothing? In today’s digital age, the role of a bank is extremely small and simple.

    Reply

Leave a Reply Cancel reply

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

This site uses Akismet to reduce spam. Learn how your comment data is processed.

The Question of the Week:

Do you think the US will eventually return to some form of gold standard?

View Results

Loading ... Loading ...

Recent Posts

  • Black Coffee: Red Ink and Green Confetti
  • Money Issues Ruining Your Relationship? Here Are 5 Ways To Fix Them
  • Filling Out the 1040 Form: Key Points to Know
  • How to Use Line Shopping as a Financial Tool When Betting on Sports
  • Grandfather Says: Eulogy for a Friend
  • How to Financially Prepare for a Divorce
  • Behold the $100,000 Hamburger!
  • Should You Diversify Your Portfolio With Crypto? 3 Pros and Cons
  • 3 Mistakes to Avoid When Starting Out as an Investor
  • 5 Investment Strategies To Help You Save For Retirement

Disclaimer

This site is for informational and entertainment purposes only, and the content herein should not be mistaken for professional financial advice. In fact, making investment decisions based on information published here, or any other website for that matter, is more than unwise; it is folly. This website accepts advertising in the form of monetary and other compensation; as such, topics of discussion are occasionally influenced by these advertisers. Sometimes, an article may also include affiliate links, meaning, at no additional cost to you, this blog earns a commission if you click through and make a purchase (for example, as an Amazon Associate I earn from qualifying purchases). Remember, you and you alone are responsible for the decisions you make in life, so please contact an independent financial professional for advice regarding your unique personal situation.

Sign up for the weekly Len Penzo dot Com newsletter
Len Penzo dot Com Delivered Weekly
Join more than 30,000 readers and fans who enjoy personal finance and macroeconomics with an offbeat twist!
Invalid email address
Thanks for subscribing!

Popular Now:

  1. 1. The 7 Most Popular Ways to Commit Financial Suicide
  2. 2. 25 Examples of Shrinkflation That No Longer Fool Consumers
  3. 3. The 10 Worst Things I Ever Bought
  4. 4. 7 Perplexing Money Questions Without a Good Answer
  5. 5. My Cola Taste Test: Is Coke Really Better Than Pepsi?
  6. 6. Planning a Wedding? Here Are 9 Ways to Ensure You’ll Pay Too Much
  7. 7. Economic Collapse 101: How to Prepare for Water Supply Disruptions
  8. 8. A Simple Test to Know If It’s Better to Rent or Buy a Home
  9. 9. The Big Secret the Banking Industry Doesn’t Want You to Know
  10. 10. 4 Good Reasons Why Some Quarters Are Painted Red

All-Time Most Popular:

  1. 1. 19 Things Your Suburban Millionaire Neighbor Won’t Tell You
  2. 2. Dear Friend: Here Are 41 Reasons Why I’m NOT Lending You the Money
  3. 3. Why Your Expensive Luxury Car Doesn’t Impress Smart People
  4. 4. If You Can’t Live on $40,000 Annually It’s Your Own Fault
  5. 5. 21 Reasons Why Corner Lots Are for Suckers
  6. 6. 4 Smart Reasons Why College Isn’t for Everyone
  7. 7. 18 Fast Facts About Social Security Numbers
  8. 8. My Ketchup Taste Test: Upset! Guess Which Brand Topped Heinz
  9. 9. Why I Prefer a Spreadsheet to Track Expenses and Manage My Finances
  10. 10. Here’s a Simple Trick for Getting Credit Card Interest Charges Waived

Copyright © 2021 Len Penzo dot Com · All Rights Reserved · Designed by Nuts and Bolts Media

© Len Penzo dot Com 2008–2021