An article regarding end of 'free' banking within five years

book12

An article regarding end of 'free' banking within 5 years: https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=1&cad=rja&uact=8&ved=0CCAQqQIoADAAahUKEwiR5ounpfvHAhVEBBoKHULGBx0&url=http%3A%2F%2Fwww.independent.co.uk%2Fnews%2Fbusiness%2Fnews%2Fthe-end-of-free-banking-will-come-in-the-next-five-years-10502295.html&usg=AFQjCNHF7Nr9n-EcQIFbKhnvFmH3IsfOaQ

While we are on this topic, do you think building societies who offer bank accounts (Nationwide, Coventry, Norwich & Peterborough, etc...) will offer fee free bank accounts, or will they follow the banks and charge a monthly fee? If they don't charge a fee, and the banks do, we would see a big influx of people having bank accounts with building societies.

I think credit cards will be next. I know there are credit cards with and without fees monthly/annual fees. Maybe in the future all credit cards will have a monthly/annual fee. What do you think?

Zanderman

Working link:

http://www.independent.co.uk/news/business/news/the-end-of-free-banking-will-come-in-the-next-five-years-10502295.html

EarthBoy

I wouldn't waste your time worrying about it because it's very unlikely to happen. The article is nothing more than one man's opinion:

"That's the view of Steve Davies, head of retail and commercial banking at PwC".

He's an accountant, not a banker, so what would he know?

The end of free banking has been rumoured for years, but as the article says:

"These banks are unlikely to break ranks for fear of losing customers, while politicians are unlikely to advocate such an unpopular idea."

It's a vote loser, so it won't happen.

SnowTiger

Stories about the death of free banking in the UK crop up from time to time.

2011:

...the days of free current accounts seem to be numbered. The banks have been warning for some time that they may be forced to start charging for current accounts.

2013:

The UK is one of the few places in the world where current accounts are still free but the trade off is that fees and penalty charges are higher.

As the Office of Fair Trading starts to crack down on excessive charges for current accounts and credit cards there are indications that some banks may introduce monthly charges for all.

The argument is that up until recently, people paying (excessive) charges were effectively subsidising those who kept their finances in check. The fairer solution, it is argued, would be to apply a monthly charge and only apply penalty charges that reflect true costs incurred by the banks.

This is Money and our sister title Money Mail have been campaigning against unfair charges since 2005.

[...]

The Halifax Ultimate Reward Account is an attractive option. If costs £12.50 a month...

Yes, This is Money and the Daily Mail has been campaigning against free banking since 2005. Ten years!

Halifax's "attractive option" doesn't look very attractive to me. I think I'd rather keep my Halifax Reward account, which pays me a fiver a month, rather than subsidise those who go in to the red every month.

Santander upping the monthly charge on their 123 account by £3 a month doesn't signal the ending for free banking in the UK. Even Santander offers a current account that doesn't come with a monthly charge.

nyermen

Ignore a consultancy firm article designed to keep their name in the news.

Bank accounts wise, yes - some banks are upping charges, however others are scrapping them (HSBC Advance is now free if you earn a certain amount, the £10 insurance aspects item is now optional).

Credit Cards are very unlikely to go, as they make a percentage of each purchase for the bank. It'd be too easy for "disruptor" banks to launch a competitive product (a term for new, mainly online only banks who don't have baggage in the closet).

The only threat could be to Bank Accounts that tend to earn nothing for banks (low balances but no debt). Basic bank accounts aren't enshrined in law (yet), but the banks provide them because the regulator has quietly said we'll make you if you don't.

Peter