Statement on basic bank accounts

15 December 2014

In response to today’s announcement by the Treasury that the UK’s nine largest current account providers are entering into a voluntary commitment to provide free-of-charge basic bank accounts by the end of 2015.

Sue Lewis, Consumer Panel Chair, said:

“It is good news that banks will no longer keep their basic bank account offers ‘under the counter’. Given that most banks have been reluctant to market basic bank accounts, many consumers have been unaware that they can ask for one.

However, access is not an end in itself. Products must meet consumers’ needs. We have long argued for minimum standards for basic accounts, and we are pleased to see these are part of the agreement.

Nobody likes nasty surprises, and avoiding them is particularly important for basic account customers, so we welcome the ‘no charges’ aspect of the agreement. Wider access to free-of-charge basic accounts seems like a positive example of a cross-subsidy, but we shouldn’t forget that it has to be paid for somehow. As we said in a recent discussion paper, a transparent and competitive market for personal current accounts can only be achieved by knowing who is paying, and how.”

Today’s commitment by the banks is voluntary only. The Panel looks forward to the legislation for a right to a basic bank account, in line with the EU Payment Accounts Directive, in due course.


Notes to editors.

  1. In October 2014, the Panel published a discussion paper on cross-subsidies in the market for personal current accounts, seeking to stimulate debate on the advantages and drawbacks of cross-subsidising basic bank accounts, as there has been no consensus to date as to whether and how this should happen.
  2. The EU’s Payment Accounts Directive (“PAD”) (Directive 2014/92/EU) requires that basic bank accounts are made available to all consumers, free of charge or for a reasonable fee, by September 2016.
  3. Article 16 of the PAD requires all EU Member States to establish a “binding framework [which] ensures its full application in a sufficiently clear and precise manner so that the persons concerned can ascertain the full extent of their rights and rely on them before the national courts”.
  4. The Consumer Panel is a statutory body under the Financial Services Act 2012. It was initially established by the Financial Services Authority in December 1998. The Panel advises the FCA on the interests and concerns of consumers.
  5. The Panel’s membership is drawn from a broad range of backgrounds with expertise including market research, law, financial services industry, financial inclusion, European Regulation, financial regulation, consumer advice, campaigning, communications, compliance and later-life issues.
  6. The emphasis of the Panel's work is on activities that are regulated by the FCA, although it may also look at the impact on consumers of activities outside but related to the FCA's remit. More information about the Panel's work is available on its website or via its LinkedIn and Twitter accounts.