Half of Low Income Consumers Choose Cash Over Basic Bank Accounts
Research concludes basic bank accounts are 'failing' low income consumers
25th August 2005
A report by the National Consumer Council (NCC) has concluded that basic bank accounts are failing to reduce the gap between the poorest members of society and the rest, with people on the lowest incomes still facing financial exclusion.
Around half of low income consumers still prefer to manage their finances in cash, deciding that basic accounts didn't meet their needs. Even worse, those who did open accounts were more likely to fall behind with bill payments.
Basic bank accounts are no-frills current accounts for people with low incomes or poor credit ratings, which allow them to get discounts on bills by setting up direct debits, and to have government benefits paid direct.
The report says, amongst other findings, that the monthly nature of direct debits didn't suit people on low incomes, who tended to manage their finances on a weekly basis rather than monthly.
Representatives of the banking industry pointed out that the frequency of direct debits is in fact not under the control of banks, but of the company requesting the debit.
Read More: Money Guardian : Basic bank accounts 'fail to help the poorest'
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