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| How do you live without a bank account? | How do you live without a bank account? |
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| By Vanessa Barford BBC News With banks teetering on the brink of collapse can one live without a bank account? | |
| "Everybody knows," said Gordon Brown, "that if you don't trust the banks you can't do very much." | "Everybody knows," said Gordon Brown, "that if you don't trust the banks you can't do very much." |
| Paying utility bills, receiving a salary, simply vouching for who you are - the 14-digits that comprise a bank account number and its sort code are almost as intrinsic to one's identity these days as one's name, and postcode of course. | Paying utility bills, receiving a salary, simply vouching for who you are - the 14-digits that comprise a bank account number and its sort code are almost as intrinsic to one's identity these days as one's name, and postcode of course. |
| But with some high street banks teetering on the edge of collapse this week, these once-rock solid institutions are looking more like a liability than a secure home. | But with some high street banks teetering on the edge of collapse this week, these once-rock solid institutions are looking more like a liability than a secure home. |
| But what if you were to wash your hands of banks all together? | But what if you were to wash your hands of banks all together? |
| "It's almost impossible to operate without a bank account," says Tim Newhouse, an analyst at price comparison site moneysupermarket.com. | "It's almost impossible to operate without a bank account," says Tim Newhouse, an analyst at price comparison site moneysupermarket.com. |
| Cash costs more | Cash costs more |
| "Firstly employees need a bank account to be paid by their employer, unless they are paid cash in hand or work on the black market economy. Then there is the house you live in. If you own a house outright, you're probably quite relaxed. But if you don't have a bank account, it's going to be tough to convince an estate agent to let you rent a property. It will set alarm bells ringing." It's a brave option to take - people who stick to cash should have a bank account as a fall-back position Tim Newhouse | "Firstly employees need a bank account to be paid by their employer, unless they are paid cash in hand or work on the black market economy. Then there is the house you live in. If you own a house outright, you're probably quite relaxed. But if you don't have a bank account, it's going to be tough to convince an estate agent to let you rent a property. It will set alarm bells ringing." It's a brave option to take - people who stick to cash should have a bank account as a fall-back position Tim Newhouse |
| All utility firms prefer payment through standing order or direct debit - taken straight from a customer's bank account. Stepping outside the system can mean paying a surcharge as well as restricting choice on products like insurance, says Mr Newhouse. | All utility firms prefer payment through standing order or direct debit - taken straight from a customer's bank account. Stepping outside the system can mean paying a surcharge as well as restricting choice on products like insurance, says Mr Newhouse. |
| For example, BT customers opting not to pay by direct debit or a monthly payment plan automatically incur a payment processing fee of £1.50 a month, or £4.50 per quarter. | For example, BT customers opting not to pay by direct debit or a monthly payment plan automatically incur a payment processing fee of £1.50 a month, or £4.50 per quarter. |
| Meeting energy bills by pre-payment meter, despite paying in advance, costs about £200 a year more than paying quarterly by direct debit or online, says Helen Evans from Consumer Focus. | Meeting energy bills by pre-payment meter, despite paying in advance, costs about £200 a year more than paying quarterly by direct debit or online, says Helen Evans from Consumer Focus. |
| As for broadband, a bank account is a prerequisite for most suppliers. Even getting a mobile phone often requires a bank account as proof of ability to pay. | As for broadband, a bank account is a prerequisite for most suppliers. Even getting a mobile phone often requires a bank account as proof of ability to pay. |
| "Ultimately it's so difficult and so expensive to exist without financial products, it's a brave option to take. People who stick to cash should have a bank account as a fall-back position. A good credit rating is today's must-have," says Mr Newhouse. | "Ultimately it's so difficult and so expensive to exist without financial products, it's a brave option to take. People who stick to cash should have a bank account as a fall-back position. A good credit rating is today's must-have," says Mr Newhouse. |
| But not everyone is happy to dance to the banks' tune. | But not everyone is happy to dance to the banks' tune. |
| 'Credit jigsaw' | 'Credit jigsaw' |
| Wayne, a 42-year-old musician, says he lived without a bank account for 12 years. | Wayne, a 42-year-old musician, says he lived without a bank account for 12 years. |
| It was only when he returned to university a few years ago that he was forced to open an account so he could get a student loan.Trust in high street banks has slumped to just 16% of adults | It was only when he returned to university a few years ago that he was forced to open an account so he could get a student loan.Trust in high street banks has slumped to just 16% of adults |
| "I had no option at all. I don't like debit cards because they draw you further into the credit system. I have never wanted to be monitored or in a credit culture." | "I had no option at all. I don't like debit cards because they draw you further into the credit system. I have never wanted to be monitored or in a credit culture." |
| He says the only bills he pays by direct debit are broadband - because he has no choice - but for everything else, from rent to phone, he uses cash. | He says the only bills he pays by direct debit are broadband - because he has no choice - but for everything else, from rent to phone, he uses cash. |
| "Banks and large corporate entities have a drip feed culture, everything you earn, they want a chunk of it - it is one big credit jigsaw." | "Banks and large corporate entities have a drip feed culture, everything you earn, they want a chunk of it - it is one big credit jigsaw." |
| He says he has been charged £30 interest a month ever since he went £4 overdrawn on his £2,100 loan. | He says he has been charged £30 interest a month ever since he went £4 overdrawn on his £2,100 loan. |
| "I'm on the dole now and that means I get about £60 a week because I have to pay £7.50 back every week - this banking cycle tries to constantly bleed you dry." | "I'm on the dole now and that means I get about £60 a week because I have to pay £7.50 back every week - this banking cycle tries to constantly bleed you dry." |
| Wayne may have signed on the dotted line, but his distrust is mirrored by a growing scepticism of banks amid the in recent turmoil, according to Mintel. | Wayne may have signed on the dotted line, but his distrust is mirrored by a growing scepticism of banks amid the in recent turmoil, according to Mintel. |
| While 33% of adults trusted the major high street banking brands in 2007, the figure now stands at 16% by September 2008. | While 33% of adults trusted the major high street banking brands in 2007, the figure now stands at 16% by September 2008. |
| 'Huge shift' | 'Huge shift' |
| But does this dissatisfaction actually lead people to shun banks and start stashing cash in safety deposit boxes or under mattresses? | But does this dissatisfaction actually lead people to shun banks and start stashing cash in safety deposit boxes or under mattresses? |
| According to the Citizens Advice Bureau, one in 12 households - 2.8 million adults in the UK - did not have any kind of bank account in 2006. | According to the Citizens Advice Bureau, one in 12 households - 2.8 million adults in the UK - did not have any kind of bank account in 2006. |
| But the number of basic accounts - designed for people who don't meet criteria for standard accounts - has steadily increased since 2003, when direct payments into banks and Post Offices became the preferred method for the government to grant benefits and tax credits. | But the number of basic accounts - designed for people who don't meet criteria for standard accounts - has steadily increased since 2003, when direct payments into banks and Post Offices became the preferred method for the government to grant benefits and tax credits. |
| Even with the current financial turmoil, going "bankless" these days would be a brave move, says Mr Newhouse. | Even with the current financial turmoil, going "bankless" these days would be a brave move, says Mr Newhouse. |
| "There has been a huge shift, driven by the internet and online banking, towards paying through bank accounts or direct debit over the last 10 years. Technology has reduced bank costs and simplified things for customers - it's a no brainer really." | "There has been a huge shift, driven by the internet and online banking, towards paying through bank accounts or direct debit over the last 10 years. Technology has reduced bank costs and simplified things for customers - it's a no brainer really." |
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