Banks to offer basic accounts

The UK’s leading banks are set to offer basic bank accounts to customers following pressure from the chancellor.

Sky News reports that George Osborne’s request for banks to provide no-frills accounts to consumers has been supported – despite opposition from the major high street lenders.

A European Union directive requests that all key banks must offer such an account by the end of 2016, but many banks have raised concerns it could lead to them losing income.

Officials from the treasury have been holding discussions with the banks for several months over the structure of the accounts and any associated fees.

Mr Osborne may announce the support of the banks for the new initiative in his forthcoming Autumn Statement.

It is reported the major lenders, including Barclays, HSBC, Lloyds Banking Group and Santandar UK, have all now finally agreed to the basic account provision.

Under the European Union directive, it was required that banks would be able to charge ‘fair’ fees, but the government has worked with UK lenders to ensure there are no fees or charges levied on the accounts.

However, bankers have raised concerns the industry will lose around £200 million a year under the new rules, with the shortfall needing to be covered by consumers across the rest of the banking system.

It is expected that some of the basic accounts will be restricted to benefit claimants and will form a key part of the Universal Credit welfare programme.

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