Bankrupts hit another bump in the road
Sylvia Waycot, finance expert at Moneyfacts.co.uk, said: “It is worrying that this under-served section of the market is losing access to even basic bank accounts.
“Originally basic bank accounts were set up so that anyone who did not completely fit a bank’s vision of their ideal customer could still access basic banking needs such as the ability to have direct debits.
“Over time, this has become lost in translation, and resulted in only the Co-op and Barclays keeping to the original ideal.
“Unless the entire banking industry is made to share these vulnerable customers then they will be forced into running their finances via the expensive guaranteed banking system which is not run by the traditional banks and will only further exasperate anyone trying to get back on their financial feet.”
Matt Fleming-Duffy, mortgage broker at Dorset-based Wessex Investment Management, holds an unsympathetic view of the announcement.
He said: “I think this is misplaced concern. In general, people who declare bankruptcy are heavy bad debtors and should face tough penalties.
“There should be more focus on helping people who deserve a leg-up into the banking system and mortgage market, for example those who have had small slip ups and are trying hard to pay back debt.”
The shrinking assistance of banking facilities for bankrupts will not have an adverse affect on the mortgage industry, added Steve Walker, managing director of Promise Solutions.
He said: “People who are currently bankrupt cannot obtain a first charge mortgage so their inability to obtain a bank account doesn’t make a difference.
“Second charge lenders who offer facilities to pay off the bankruptcy are likely to take a more flexible because they know that the bankruptcy will be repaid.”