Earlier this year Lord Turner, the chairman of the Financial Services Authority, called for an end to free banking over concerns that the model stifles competition in the banking industry.
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As the debate surrounding free banking rages on, consumers have voiced their opposition to the move in a recent uSwitch.com survey.
Three quarters of Brits surveyed argued that they are against the idea of being charged for their current account, while 81% said that they feel even a small fee wouldn’t be appropriate.
Further findings from the research revealed that 16% of consumers felt that they wouldn’t be able to meet the costs of holding a bank account.
Almost a third of consumers felt that they would have to rethink having a current account at all if the charges were introduced.
While rationale behind the end of free in-credit banking is an attempt to increase transparency within the industry and lead to greater faith in the banking industry, it appears that consumers are yet to be sold on its advantages.
More than half believe the initiative would just be another attempt by banks to increase their profits, while 95% feel the charges would do little to professionalise the sector.
“The end of free banking would be a double-edged sword – what we gain in simplicity and transparency we lose in financial exclusion. There is a real danger that many consumers will be priced out of the current account market,” Michael Ossei, personal finance expert at uSwitch.com.
“The fact is that those without bank accounts tend to end up paying more for household bills, goods and services – they are often excluded from the best deals and have to resort to more expensive payment options instead.”
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