Bank reforms 'have to involve all'

The government must consider the needs of the one million people without access to mainstream banking as part of its reform of the sector, a consumer group warned. 

A report by Consumer Focus found may people could see the benefits of having a current account but were often unable to open one. 

It said these people already missed out on discounts available for paying bills by direct debit. 

It also made it difficult for them to access mainstream credit and save effectively. 

The group also noted that it could exclude them from paid employment in the future. 

The group's report, On the Margins, which included 50 in-depth interviews with people who do not have a bank account, found that reasons for financial exclusion included bereavement, bankruptcy, illness or disability, homelessness and mental health problems. 

Reasons for not having a bank account ranged from not having the necessary forms of identification, language and literacy issues, a lack of understanding of financial services and existing debts.

More than half of those interviewed had previously had a bank account, but either they or their bank had closed it as a result of penalty charges or debt building up through overdrafts.