Free banking slowly disappearing from our lives

monkey bank manager

As widely predicted, UK banks are gradually converting their customers from free banking to paid-for accounts. A combination of falling profits and the impending carnage from the banks’ inevitable defeat in the excessive charges case.

There are now 3.7 million more fee-charging accounts than there were three years ago according to research in the Daily Telegraph, with 44 per cent of all accounts now paid-for, compared to 37 per cent in 2006 – and the figures are sure to rise.

Richard Kibble of PricewaterhouseCoopers said: “We appear to be at a tipping point where it is likely that some sort of charge for a current account is seen as normal. The number of people who are paying fees of some form has risen quite significantly over the past decade. The UK is quite unusual by not having explicit charges, unlike Europe and the US.”

So, do you get anything for your money? Not a lot – most customers don’t use the ‘benefits’ that come packaged with paid-for accounts, such as free travel insurance, roadside cover or a square foot of free velvet on Valentines’ Day.

Lesley McLeod, an executive director of the British Bankers Association, said there are more added-value accounts on offer. “As long as there is choice out there and people are quite clear about what they are signing up to then we don’t see a problem with them,” she said.

Heed our words – the day isn’t far away when those of us who opt for free accounts are stripped of luxuries such as plastic debits cards (we’ll have to make do with cardboard ones) and in-branch counter service. We’ll only be allowed in the branch for an hour a week and the till we get served at won’t have the little microphone and speaker system, so we’ll have to shout and it’ll be awful.

It’s going to be like apartheid all over again… you heard it here first.


  • graham
    not sure if we are near a tipping point. 3.7m customers paying itsn't a high number. Most of these will either a) be stupid or b) actually utilise all the crappy benefits that are shipped with the account. I am waiting for the first bank to actually remove their free accounts because I'm sure thousands of customers will leave them for another bank. The other banks will get worried and not follow suit.
  • IfYouCopyMyNameYouAreGay
    I have a pay for account which includes mobile phone insurance, which is cheaper than buying the insurance separetely. I've claimed once so it's paid for itself for the next 2 years.
  • Noel
    Graham I am not sure if you read the article correctly - There are 3.7M MORE customers than 3 years ago. Not 3.7M in total. also it says that 44% of accounts are paid for. As far as I am concerned, that is quite a large percentage, another year or so and it will be more than 50%. I think it is much more likely that more than 1 bank will remove their free accounts.
  • RobC
    If they remove free banking , which looks likely the second they gain critical mass , I`ll have my money paid into a building society current account and draw down from that , luckily I live in a big city and can do that , others are fecked . If the building societies start charging then its excrement pasted onto their windows time , I am a circus monkey .
  • Sir K.
    They pay a tenth of a pittance interest for the privelige of holding/using our money to lend/inest and now the cheeky buggers want paying too!!!!
  • Matt-S
    surely that 44% number includes business and merchant accounts, which have always been paid for. I'd suspect the number is much smaller for individuals. Also does that include accounts that technically have a charge, but it's waived if you hit certain conditions such as depositing £1000/month?
  • Sam
  • xman
    I have had a paid account for years. The travel insurance (claimed on several times without quibble), roadside assistance and mobile phone insurance all mean that I am saving money by using it. The "benefits" are not nearly as crappy as you might suggest!
  • steve j.
    With Baclays the RAC cover alone is worth £200 a year, then the travel insurance worldwide plus boiler cover its cheap man
  • james d.
    I have barclays graduate additions, as others have said all the benefits you get are easily worth it. I have called the RAC out many times and it even includes Home Start. Add the mobile phone insurance and my £1000 interest free overdraft and it's a bargain at £7 a month.
  • Lizard
    Surely the customers lending our money to them for them to reap 2-10 times the profit we make from the "interest" the 0.01% constitutes means that actually us customers are providing a service to the banks? Where would they get their 100 billion bonuses from if we all stuck our wages under the mattress?
  • IfYouCopyMyNameYouAreGayToo
    "Posted by IfYouCopyMyNameYouAreGay | October 31st, 2009 at 2:25 pm" Hey, there are just soooo many of us queens about aren't there? I stuff my money in my mattress (no charges either) and haven't had any complaints yet!
  • Mark
    Now that they can't rip off people who go overdrawn or pay late, they're coming for the rest of us.
  • Simon
    Posted by Lizard | October 31st, 2009 at 6:27 pm - Where would they get their 100 billion bonuses from if we all stuck our wages under the mattress? The truth is all the banks would fold if people took their money out. Every single bank (including the BOE) is insolvent. They operate using Fractional Reserve Banking, they can print money whenever any deposits cash in their accounts or they lend anyone money. There isn't a bank in the Western world with the funds to actually pay off its accountees.
  • Michael
    Cheers Martin!
    One of the guys I work with swears by banking in Silver Bullion. The best way to make a swift return on your bucs at this time!
  • Maude
    @Matt-S: 'surely that 44% number includes business and merchant accounts, which have always been paid for.' Abbey have been offering free business banking for a very long time.

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