Banks face revolt if charges launched for present accounts | Politics | News | EUROtoday

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British banks danger a buyer revolt if month-to-month charges are launched for present accounts. Three out of 4 folks say they’re doubtless or very more likely to ditch their financial institution if fees are launched.

Fears that free banking might finish had been hiked this month when Nikhil Rathi, chief govt of the Financial Conduct Authority, mentioned the regulator wouldn’t “stand in the way” if enterprise fashions change.

Traditional banks have closed hundreds of branches and face new competitors from on-line rivals. But the analysis for the Centre for Social Justice suggests banks bosses will face an indignant backlash if prospects who keep in credit score are hit with charges.

Opposition to charges is even greater amongst these on low incomes. Four out 5 who usher in much less £15,000 mentioned they’d swap banks to keep away from new fees.

Matthew Greenwood, head of debt on the influential suppose tank, mentioned: “This poll reveals the huge disruption the removal of free banking would have on people, particularly those who can least afford the fees.

“The regulator’s consent for banks to take this alarming step shows alarming disregard for these customers and will erode their choice and ability to secure the banking services most of us take for granted. We are already seeing the pernicious impact of the so-called poverty premium, where the poorest are having to pay more than the richest for basic services – this step will only make this worse.”

The CSJ fears such a transfer would “deepen the woes of already cash-strapped consumers”.

The Financial Conduct Authority argues that free banking for normal accounts is a “market and commercial decision, not a regulatory requirement”.

However, main banks stay required to supply free accounts for individuals who don’t qualify for normal providers – actually because they’ve a poor credit score historical past. These “basic” accounts don’t include a chequebook or overdraft providers.

A spokesperson for UK Finance, which represents the banking trade, mentioned: “There is a wide range of different current accounts available and a competitive switching market. Some accounts have a monthly fee as is more common in other countries, but most current accounts in the UK do not have any sort of monthly fee.

“A number of major banks have publicly stated they have no plans to charge monthly fees.

“Alongside this, the nine largest personal current account providers are required to offer basic bank accounts that are fee-free –

“HM Treasury’s most recent statistics show that over seven million of these have been opened.” Major names in banking stress that they proceed to supply free providers.

Santander affords a free “Everyday Current Account” alongside an “Edge-Up” account. For a £5 month-to-month charge, this permits prospects to earn cashback on spending and curiosity on their in-credit balances.

Likewise, Barclays affords free customary accounts in addition to paid-for choices.

A Nationwide spokeswoman mentioned: “Nationwide has no plans to introduce charges to use its current accounts. Nationwide’s FlexPlus packaged current account comes with a monthly fee relating to all of the benefits that come with the account.”
An HSBC spokesman mentioned: “We don’t at present cost charges for working a present account and don’t have any plans to take action.