Make bank account a legal entitlement, MSPs are urged
High street banks continue to reject applications for bank accounts, according to charity Grand Central Savings (GCS), excluding them from basic financial services. And as the Scottish budget goes to a final vote today, GCS, which provides free basic bank accounts for the socially and financially excluded, calls for the right to a bank account to be enshrined in Scottish legislation.
Jackie Cropper, chief executive of GCS - who writes on page 28 of The Scotsman today - warns that the consequences of being rejected for a bank account will become increasingly dire as unemployment rises and the pressure grows on struggling households. Her warning is echoed by Citizens Advice Scotland (CAS), which hit out at the UK's banks for failing to repay taxpayer support by implementing more socially responsible policies.
Cropper said: "Today, as Scotland's politicians vote on the budget that will affect Scots in the coming year, we estimate that a quarter of a million adults in Scotland do not have a bank account, resulting in many thousands of Scots struggling with the essentials of life.
"Without an account, getting a job is difficult, keeping your money safe is hard and running a home can be much more expensive. As financial cuts begin to bite, it must be assumed that this problem will only increase in the coming months and years."
People are typically rejected for bank accounts because they have debt issues, are unable to provide sufficient ID or have a lack of credit history. One in ten Scottish households does not have a bank account, rising to a fifth in the most deprived areas, according to recent CAS research. It said unemployed Scots were being forced to turn down job opportunities because they have no bank account into which employers can transfer their pay.
Cropper said: "Many of our customers have been refused accounts at high street banks, sometimes on numerous occasions, perhaps because of lack of ID, debt issues or a lack of credit history. These people remain financially excluded, in many cases simply because they cannot afford the 140 necessary to get the ID required to open an account."
Lucy McTernan, chief executive of CAS, said poor banking policies were a common cause of the problems experienced by Scots seeking help from CAS.
McTernan said: "We have talked of a 'reverse Robin Hood effect' operating in the banking sector - with the system seemingly geared towards making the poor poorer in order to ease the problems of the recession for the rich."We call for the support of all MSPs in championing these issues and encouraging banks to pursue and implement policies and practices that help rather than hurt people living in Scotland."