If the media was to be believed, the fact that there are people without access to bank accounts in the UK has only just been discovered. Nothing could be further from the truth. The issue is real and ongoing. Let's have some facts. A thread....
The Financial Conduct Authority (the FCA) has responsibility for monitoring this issue. It issued a report on it earlier this year. The data in this thread all comes from there. fca.org.uk/publications/f…
The number of unbanked adults in recent years was as follows:
Around one in fifty adults are unbanked.
The demographic looks like this:
As ever, it seems to be the young who lose out: it is also especially hard for them to be unbanked, I suspect.
The demographics of those unbanked are further explained as follows:
As the FCA also notes:
"There were higher proportions of unbanked adults in Southern Scotland (6%), Outer London – West and North West (5%), Greater Manchester (4%), and the West Midlands (4%)."
They add:
"There is also a strong link to deprivation, as 3.6% of adults in the most deprived areas of the UK are unbanked, compared with less than 0.6% in the least deprived areas."
So, let's be clear that the problem of being unbanked does not mainly arise from having a bank account closed: it arises because a bank account is not available.
This, however, is not seen as a problem for all those without bank accounts. As the FCA notes:
One-quarter of the unbanked might not want a bank account. About a fifth do. The rest would like the option. What is apparent is that people aren't aware that large banks are legally obliged to offer basic bank accounts. These do not allow overdrafts but do provide payment cards:
It would seem that very little effort is being made to make people aware of this service.
Around 15% of all applications for financial services products are refused, according to the FCA. Those being refused have the following profile, with all the usual prejudices in society obviously present:
Credit facilities were by far the most likely product to be refused:
However, bank accounts were also refused:
A staggering 16% of those who applied for a basic bank account were refused, double the rate for routine accounts.
There were reasons for rejection, of course:
It would appear that potential political bias by the organisation to which the application was made is a very limited issue.
There were much stronger reasons why people felt unbanked. One was because some (mainly older) people have a dependence on branch banking:
Too many of these people are being unbanked by the closure of their branches:
There is also a massive problem with exclusion as a result of banks relying on digital access:
There is also a barrier to data on banking for the same reason:
So, what to suggest?
I think that there are three vital issues to note.
The first is that if access to banking is now a social necessity (and I think it is), then the current situation of those unbanked is unacceptable.
Second, it is apparent that the current behaviour of commercial banks is not addressing this issue. Their focus on supposed efficiency is achieved at a considerable cost to many of their customers, many of whom might be considered the more vulnerable.
Third, when 16% of applications for basic bank accounts are being refused there is no safety net being provided.
In that case there is a need for real reform and this can only come from a state bank that:
• Guarantees basic bank accounts
• Has a wide High Street presence
• Is focussed on providing financial assistance
• Has the goal of achieving inclusion.
Which party will offer this?
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Rachel Reeves told Laura Kuenssberg this morning that the pensions industry had failed the people of this country. Some obvious questions follow as a result. A short thread...
Why, if the pension industry has failed so badly, does she want to force people to pay more it in pension contributions, as seems to be her plan?
Why, if the pension industry has invested so badly for this country, does she think it will start doing better now if she gives it more money?
The most useful thing I think I can do this morning is suggest questions to ask politicians in this election. A thread.
The following list builds on work referenced on my blog, and most especially the Taxing Wealth Report that I published recently. taxingwealth.uk
The list of questions is not necessarily in any order of priority. Themes are repeated quite deliberately because that is necessary when all politicians are evasive.
Rishi Sunak is standing outside Downing Street saying that the newly chosen MP for Rochdale, elected yesterday, is the reason why he must crush our democratic freedoms. In the process he appeals to theocracy whilst totally undermining the democracy he claims to support.
The reality is that if there are extremists in the country it is those members of his party who want to create divisions in this country for their own small minded gains.
Worse, he appeals to our history as imperialist colonisers and deniers of freedom to billions to justify his position. If he wished to cause offence, that commentary is clearly intended to deliver it and is utterly blind to the prejudice created by economic and social division in our society,
Quite extraordinarily, leading politicians, including Kier Starmer and Rachel Reeves have in the last few days returned to talking about the country maxing out its credit card, just as David Cameron did in 2015. This is utterly absurd. A thread…
[This is a long thread. If it appears to stop part way through, push the button to ‘see more replies’ and the rest should appear.]
As a matter of fact, a country can’t have a credit card. It’s even questionable whether the UK has a national debt when what politicians describe as such is made up of all our notes and coins plus all the savings accounts that people have with the government.
Labour says it cannot now afford to spend £28 billion a year to deliver the investment in the climate transition that we all know we need. Let’s leave the politics and even the climate bit aside. Let me just look at the affordability bit. A thread….
Labour announced its green investment plan in 2021. And nothing much has changed since then, to be candid. For example, by the time it gets to office inflation will have been and gone.
Growth will also be non-existent then, as it was in 2021. Borrowing will be high, as it was back then. But government borrowing costs will be tumbling this year. They may not be at 2021 levels. But they really won’t be an obstacle to spending.
There is justifiable outrage right now about the fact that the Post Office has been able to prosecute sub-postmasters itself based on data it generated. I get that anger, but we should remember that HM Revenue and Customs do this every day to thousands of people….
[This is a long thread. If it appears to stop part way please press the ‘See more replies’ option below the tweet where it appears to run out and the rest should appear]
HM Revenue and Customs (HMRC) is, when it comes to imposing fines, quite literally a rule unto itself. It imposes millions of fines a year. Many of them are for not submitting tax returns, and many of those are on people who had no taxable income, or none to declare.