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Basic bank accounts: what are the options for bankrupts?


In 2008/09, 0.85 million people in Britain didn't have access to a bank account, according to the Treasury. This was down from 0.89 million in 2007/08.

It's by no means a huge proportion of the overall population, but it's still a notable figure. Why don't these people have a bank account?

Some choose not to have one, for any number of reasons. Others, however, can't (or think they can't) get one. When you apply for a current account at a high-street bank, they usually run a credit check. If you have a poor credit history (for example if you've struggled with debt in the past, had a County Court Judgement against you or been made bankrupt), you could be turned down.

Bankrupts in particular can struggle to find an account. Until recently, The Co-operative Bank and Barclays both offered a solution to this problem: basic bank accounts that were available to almost anyone, including undischarged bankrupts.

Last month, however, The Co-operative Bank announced that it is no longer offering this service.

The managing director of retail banking at The Co-operative Bank, John Hughes, explained the move. He said: "Across the industry there has long been an un-level playing field in the provision of basic bank accounts, with our bank doing far more than most, and we have been calling for some time for this to be addressed. 

Unfortunately it has now come to the stage where our disproportionate market share of the basic bank account market has continued to grow significantly, and regretfully, we now need to take steps to address this."

It can be very difficult to get by day-to-day without a bank account. Most employers now pay wages electronically, directly into employees' bank accounts. Services like online banking, debit cards and ATMs provide ways to manage, spend and withdraw your money whenever - and wherever - you want to. In its most basic form, a bank account is just a place where you can keep your money securely.

For somebody trying to get back on their feet financially (like discharged and undischarged bankrupts), a bank account is essential. So what can you do if you're struggling to find one?

Well, there are other options available. For example, thinkmoney offers an alternative to a basic bank account. It's suitable for undischarged and discharged bankrupts - in fact it's open to everyone, because there's no credit check. The account has also just been accredited with a four-star rating from the Fairbanking Foundation - one of just three accounts to receive this rating.