Social enterprise offers current accounts for the poor
Consumers turned away by high street banks are being given the opportunity to open a current account with London Rebuilding Society.
For £1 a week, the ‘change account’ will offer a full range of services, including direct debits, standing orders, a visa prepaid debit card, budgeting facility and full mobile banking.
Many poor people are excluded from holding current accounts and are offered basic accounts from high street banks instead. These types of accounts don’t offer services such as direct debits and cannot be used in shops.
Steve Round, Chairman of London Rebuilding Society, said: “There are more than 3m people in the UK who either don’t have a bank account or are stuck on a basic bank account which simply isn’t fit for purpose and is inappropriate for their needs.
“These families, who tend to be on low incomes, are paying up to a £1000 pounds a year more for their fuel and food because they don’t have access to the right payment services. Even if they can get a proper account many refuse because they know they will be hit with unfair fees and charges which could tip them over into a spiral of debt.”
The change account will go live later this year and is open to anyone, regardless of credit rating, offering all the services of a normal current account but without hidden costs, fees or charges.
Danni Paffard of Move Your Money UK said: “Despite banking services being an absolute necessity, the big banks have ignored millions of low-income customers because they don’t think they are worth serving.
“That’s why its so great to see a social enterprise proving that, with a little innovation and by putting customers first, you can deliver fair and affordable banking services.”
Later in the year national charities and advice bodies will announce they will also offer the change account.
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