For many, a bank account is essential. Yet 4% of UK households - roughly 1.5 million adults – are what’s called “unbanked”, meaning they don’t have a bank account. And part of the problem for those without an account is being unable to open one.
Of course, not all of those people want an account, but today’s “Access to Financial Services in the UK” report by the Financial Conduct Authority (FCA) shows three-quarters of a million people do want one, but can’t get one. But why is this?
Anti-fraud and anti-money laundering procedures mean you need to prove your identity when you apply for a bank account – and since some just don’t have the right documents, it’s thought ID issues account for a large number of times people’s applications are rejected.
Most people will be able to apply using their passport, bills or credit checks acting as ID. But those who don’t have these can sometimes be put off from applying, or even turned away.
You might need a bank account to:
For those without a passport or driving licence, there are other forms of identification that should be accepted.
The banks are allowed to interpret the rules for ID as they wish, which means each will have different criteria, so it’s best to check their websites for a full list. However, they should all accept the following, or a mix of the following:
A passport costs £72.50, while a driving license costs £43 by post – large amounts for anyone struggling financially. The PASS photo IDs cost around £15, but the FCA found not all banks accept them.
The easiest option if you don’t have photo ID. But getting hold of these can be a problem for people who aren’t named on tenancy agreements or bills, or don’t have a permanent address.
This kind of check is regularly used if the account has any kind of credit attached, such as an overdraft. If a credit score isn’t good enough, it can mean the application will be rejected – however, basic bank accounts don’t require these checks.
If you don’t have any of the official documents, banks should accept alternatives such as a benefits letter; immigration status document; or a letter from a prison governor, care-home manager, homeless shelter or place of study.
Unfortunately, FCA evidence seems to suggest some bank staff and customers aren’t aware of these options. If you face problems, ask them to check their web pages which should detail what is and what isn’t accepted.