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Basic bank accounts improved financial inclusion

6th December 2007 Print
BBA figures show that there are over 7 million ‘basic functionality’ accounts being used by UK customers. This is a clear demonstration of improved financial inclusion in recent years.

Since Universal Banking began in April 2003, 2.7 million post office? accessible accounts have been opened (around half of which for customers with no previous banking relationship, according to BBA research) and more than 320,000 have been upgraded. The latest quarter saw 167,511 accounts opened net (ie accounts opened less accounts closed) and 25,255 existing accounts upgraded.

Before and since Universal Banking, banks have also offered other basic-functionality accounts, accessible through branches, mobile branches and cash machines. Since April 2003, a net total of 704,775 such accounts have been opened and 209,053 upgraded. There are currently 3.8 million of these accounts in operation.

David Dooks, BBA director of statistics, said: “Basic bank accounts are effective in improving financial access. Some 50,000 new accounts are opened each month and the Action Plan for Financial Inclusion report today recognised that one? third of accounts are used to make electronic payments and 40% of account holders see their account as a safe home for their money, withdrawing cash from ATMs 3 or more times a month. A basic account also provides greater awareness of other banking products - more than 8,000 basic accounts a month are upgraded to more fully-featured accounts and, as the Action Plan for Financial Inclusion report acknowledges, 1 in 5 basic account holders have opened savings accounts.”