The Banking Poverty Premium
22 April 2019
For many of us, having a bank account is a basic fact of life. Our wages get paid in, we try to save, we borrow when we run out of cash, and we increasingly use our cards and smartphones to make a myriad of payments. Having a bank account means that our money is safer and easier to spend than ever before. We can order everyday items like food, furniture and flowers to be delivered to our house because we have access to a bank account and the internet.
“Over a million people in the UK are still unbanked…these people are also being hit with a Banking Poverty Premium of up to £485 per year.”
But as new technology in banking improves many people’s lives it is also creating a divide between the haves and have-nots. Over a million people in the UK are still unbanked — they have often been ignored by the traditional banks and miss out on what we deem to be basic services like internet shopping, contactless bank cards and products like car insurance that are almost impossible to buy with cash.
In this report, we’ve shown that these people are also being hit with a Banking Poverty Premium of up to £485 per year. The unbanked — who are often those with the lowest incomes — are paying more than you or I for things like electricity, gas and loans simply because they don’t have a bank account.