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Bank Services: Coronavirus

Question for Treasury

UIN HL11219, tabled on 8 December 2020

To ask Her Majesty's Government what assessment they have made of the impact of the COVID-19 pandemic on those who are unbanked.

Answered on

21 December 2020

The Government is committed to supporting all groups in society, including the most vulnerable, with the challenges caused by Covid-19. The Government has boosted the generosity of the welfare system by £7.4bn in 2020-21 including through a temporary £20 a week increase in Universal Credit (UC) standard allowance and Working Tax Credit basic element, an increase in Local Housing Allowance rates and relaxation of UC minimum income floor for self-employed claimants. The Department for Work and Pensions offers HMG Payment Exception Service that allows customers access to funds via PayPoint outlets, for individuals who cannot access a bank account.

However, the Government recognises the importance of having a bank account, as it provides a way of receiving income, whether that be salary, pension, benefits or tax credit and opens up opportunities to access other financial products such as savings accounts, credit, insurance and mortgages. Throughout the Covid-19 pandemic, HM Treasury and the financial regulators have worked closely with banks, building societies and credit unions to maintain branch access for essential services, including for the purposes of opening a bank account.

The Treasury does not make assessments of the number of people who do not have a bank account. However, in 2017, the Financial Conduct Authority (FCA) published the results of the Financial Lives Survey which found that 1.3 million UK adults do not hold an account they can use for day-to-day payments and transactions.

The 9 largest personal current account providers in the UK are legally required to offer fee-free basic bank accounts to customers who do not have a bank account in the UK or who are ineligible for a bank’s standard current account. The Treasury publishes data on basic bank accounts annually. The December 2019 publication shows that in total there are nearly 7.5 million basic bank accounts open in the UK. More information can be found here:

https://www.gov.uk/government/collections/basic-bank-accounts

Answered by

Treasury