We may have to now spend before we save
Published On 21 February 2007
Banking for free is something that we all take a little for granted in this day and age but it seems that in the future we may mirror our European cousins' banking approaches. This is because the UK could be moving to a more continental style of banking where we will have to spend for the right to save.
In many countries in Europe, consumers have to pay for the services of a bank account whereas this has traditionally been free in Britain. However a Defaqto report has suggested that many UK banks will switch to 'pay as you go' services in the future.
The financial research company has warned that free banking could disappear within two years as banks rally against consumer and regulatory pressure.
Despite customers enjoying free banking for more than 23 years, Defaqto suggests that consumers will increasingly see the advent of monthly fees or even pay as you go banking fees where the amount one pays equates to the level of account use.
David Black, Defaqto spokesman, said: "I will be very surprised if free banking is universally available in two years time. Exceptions such as basic bank accounts for the less well-off will remain but the range of services on those accounts – they don't for instance offer overdrafts – will not be suitable for most customers.
"The first major provider to introduce charges for all customers is going to take a lot of flak but it is likely that the majority of the main providers will then follow the lead. I would then expect to see a significant increase in account switching as well as many people closing their secondary accounts."
Around one million consumers are believed to have downloaded complaint forms from consumer websites for bank charging since November last year.
