The UK government is all set to announce the details pertaining to new free-of-charge basic bank accounts in order to help people manage their money without the fear of running up an overdraft.
Nine major banks and building societies covering over 90% of the UK current account market are said to have agreed to offer a better deal to customers.
Before the end of 2015, banks such as Barclays, Lloyds Banking Group, HSBC and Royal Bank of Scotland are expected to offer bank accounts without any charges.
These accounts are said to be available to anyone who does not already have a bank account or who has financial difficulty and cannot use the existing account.
The Economic Secretary to the Treasury Andrea Leadsom has hailed the agreement between the government and the banking industry to establish new accounts that will end bank charges if a direct debit or standing order fails.
Customers opening the new account will also be offered similar services on the terms as other personal current accounts provided by the banks.
They will have access to all the standard over-the-counter services at bank branches and at the post office, and access to the entire ATM network.
Economic Secretary Andrea Leadsom said: "I welcome the banks’ agreement to remove these charges from their basic bank accounts.
"This means that people who don’t have an account, or who would struggle to get a standard account due to money problems, will be able to manage their money with certainty and clarity."
UK’s Financial Services Consumer Panel chair Sue Lewis said: "It is good news that banks will no longer keep their basic bank account offers ‘under the counter’.
"Given that most banks have been reluctant to market basic bank accounts, many consumers have been unaware that they can ask for one."
Image: UK’s HM Treasury. Photo: courtesy of UK Government