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® current 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 for a Suits Me® current account today and open your account in minutes. Once your account is open, you’ll gain instant access to your account number and sort code, online banking facility and free mobile banking app to easily and efficiently manage your finances.