A study by the British Bankers' Association (BBA) and Bristol University, published yesterday, found that almost one in 10 adults have no bank account. The authors of the survey suggested that a large number of "the unbanked", usually with low incomes, keep their savings in cash because they need to pay weekly utilities bills and distrust the current paying methods such as Direct Debit.
The researchers maintain that these non-savers could be wooed by a basic account, with instant access to the cash and little risk of going overdrawn. So far, banks have refused to provide these types of accounts because they claimed they were too expensive to run. But Elaine Kempson, director of Bristol University's personal finance centre and one of the authors of the study, yesterday called on the utilities to link up with banks to set up the accounts.
She said gas, electricity and water companies paid a price for the tendency of the unbanked to pay in small weekly instalments as they have to process more payments. "[These accounts] may not be viable for a bank on its own but we need to think more radically about the way we meet the cost of these accounts. After all, much of the saving is used to pay utilities."
Tim Sweeney, director general of the BBA, also called for " partnerships" between the banks and other private sector firms.
The Bristol University study, based on more than 1,000 interviews, found that between 6 and 9 per cent of the population has no access to a bank account. The vast majority of these non-savers, almost 2 million, are people who have never had a bank deposit, largely the elderly and members of marginalised communities.
The highest proportion of unbanked was to be found among women, the over 70s and the unemployed, says the report.
A surprisingly small number of interviewees - around 100,000 - had been rejected by a bank, largely due to a history of credit problems.