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Legal bank access for all

June 03 2014
You will soon be able to open a bank account without having to provide proof of address

Homeless people will be able to open a bank account without having to provide proof of address for the first time, under a new law passed by European Parliament.

The ruling also specifies that anyone legally residing in the EU cannot be denied the right to open an account on the grounds of nationality or residency.

It has been seen as an important step towards financial inclusion. Currently, many homeless people are denied access to a bank account because they don't have a fixed address, or have a poor credit history.

Advocates have highlighted the downsides of having access to cash only, as it can be more easily lost and stolen.

Not having a bank account also means people can lose out on savings made through direct debit plans for utility bills, for example, as well as making it more difficult to find a job or privately-rented accommodation.

"This directive is all about empowering users of common standard payment services,” said lead MEP Jürgen Klute (GUE/NGL, DE) following the ruling, which was passed by 603 votes to 21. “Guaranteeing access to basic accounts to all consumers, including migrants and mobile citizens, will stimulate economic modernisation, facilitate free movement and help the most disadvantaged in our societies.”

A recent study carried out by the Joseph Rowntree Foundation called for better promotion of decent financial decision-making and better access to suitable products and services.

Tasmin Maitland, head of innovation and good practice for Homeless Link, explains: “Homelessness services are playing a big part in this; our annual review of the sector showed that 85 per cent of projects offer in-house advice services, including financial advice, and 30 per cent of clients are engaged in money management skills.”

Although good progress has been made, there is still more that can be done to ensure the financial situation of those already vulnerable is not made worse by their current financial situation.

The research has shown that reforms recently made to the welfare benefits are having an impact upon homeless people. “We are concerned that the welfare system, instead of providing a vital financial safety net, may in some cases be pushing people even further into trouble”.

To take effect, the new rules must be officially approved by the member states, which will then have 24 months to translate them into their national laws.

Need help? citizensadvice.org.uk

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