Change in law could make it easier for bankrupts to open a bank account
Published 7 August 2013 by Linzi Nuttall
People who are bankrupt often struggle to access basic financial services, but new legislation being considered by the government could change that.
New laws that would make it easier for bankrupts to open bank accounts are being considered by the government.
The laws will make giving bank accounts to bankrupt people less of a risk for the account provider, which means they may be more willing to offer accounts to people who are struggling.
Business Minister Jo Swinson reassured that banks will feel more comfortable opening accounts for people who are bankrupt: "Banks will still make the final decisions on offering accounts, but I am confident that the change will make it more appealing to them."
The importance of bank accounts
For most people, having a bank account means they can carry out essential tasks, such as paying bills, receiving wages, withdrawing money from a cash machine or online shopping. But, for people who don't have a bank account, these basic tasks become very difficult.
"A bank account is not a luxury in this day and age, but a necessity", said Jo Swinson. "Most everyday transactions take place online, including shopping, paying for utilities and receiving salaries."
Despite the fact bank accounts are seen as a necessity, it is thought that around 1.25 million households in the UK don't have one. Not having a bank account means some people have to:
- Keep all their cash in a wallet/purse, which isn't very secure.
- Be paid in cash rather than by direct transfer (BACS).
- Pay more for their bills, as they won't receive any discounts for paying by Direct Debit.
The options available to people who are bankrupt
As a lot of banks view people who are bankrupt as a 'risk', many account providers will refuse to provide their banking services to them. That's not to say all high street banks will refuse to offer accounts to bankrupt people, but it can be very difficult.
Basic bank accounts could provide a solution, but again, the majority will not provide to people who are bankrupt and there is currently only one high street bank offering banking services to bankrupts.
There are also alternatives to basic bank accounts, such as the thinkmoney Managed Current Account, which is available to all UK residents over the age of 18. The account has the added benefit of making sure your bills are paid on time by keeping the money separate from your spending money.
Quick and easy to apply
Apply for a thinkmoney Managed Current Account today.