As many as 1.2 million people in the UK belong to the class known as the “underbanked” - the group of people who can’t access banking facilities.
Two decades ago the number was much higher but despite the roll-out of a number of different basic bank accounts, there remains a large number of individuals without a bank account. Having no bank account leads to what is described as “banking poverty premium” blocking access to the best deals for a range of products and services including mobile phones, personal loans, utility bills and broadband.
The price of being unbanked
According to The Guardian, those without access to a bank account could have to pay up to £485 more every year for a range of basic services and bills. This is because not having a bank account means discounts and the best deals aren’t available.
A number of different groups still struggle to
access banking facilities including those with a poor credit rating, those
without proof of a current UK address and migrants. Together the number comes
to around 1.2 million which the government acknowledged last month was “still
1.23 million too many”.
The cost of £485 was reported by The Guardian and takes into account the fact that paying by direct debit is often linked to better rates or a discount, and the lack of options for credit.
Those with access to a bank account paid on
average £1118 per annum for gas, electricity, mobile phones, broadband and
interest payments on a £300 loan spread over 52 weeks. By contrast, the unbanked
would have to pay £1603 to access the same services.
A financial inclusion report from the government
studied who was most affected by lack of access to banking and concluded that
18-24 year olds were the most likely age bracket, plus the unemployed.
An easy solution with Suits Me
With the underbanked still presenting a very
real problem for 1.2 million people in the UK, Suits Me offers a practical
solution. The majority of our customers choose to use their Suits Me account as
their primary bank account with all the facilities required for shopping,
saving and budgeting.
Suits Me is more than an easy alternative to
traditional banking as we offer direct debit facilities with each account. With
no credit check required, this means that banking services and direct debits
are available to those who would otherwise be part of the unbanked.
Putting a little bit of cash away for a rainy
day is always a good idea and we can help with that too. Our Savings envelopes
are a digital way of putting a little aside as and when you can afford it.
Using Suits Me means that you can access your
cash instantly but you’ll only be able to spend what you have. A convenient and
stress-free way to manage your finances, Suits Me is the solution for those who
have been shut out of traditional banking and are paying the price as a result.
Apply today to create your account or get in
touch for more information.