Is your local cash machine no longer free?

If someone is on a tight budget, how does cash help them more than an app-based account with a real-time balance and no overdraft facility? It’s much easier to see how much money one has with a numeric balance than counting notes and coins, and many of these app-based accounts having budgeting functionality, which cash doesn’t have.

People on a tight budget might not have a smart phone or feel comfortable trying to use an app or operating a budget or accounting system. Counting money does not take long and people can take with them each day as much as they wish to use. In my experience, people who use cash seem to know much better than most how much money they have. If it’s what people like doing, why try to change them? I think we’ll still be using cash in thirty years’ time – and it looks like we should because it might be the only way to keep our bank branches open.

There are a fair number of people who don’t have a bank account. I don’t know how many would not even be allowed to have one.

Perhaps we should just let people have a choice of how they manage their money. We could even do what Josh has done and find out the consequences for vulnerable and disabled people.

At least 28,000 were deemed insolvent in the first quarter of 2018, which seems to be a rising figure, so we could, I assume, extrapolate that to suggest perhaps 100,000 new bankruptcies per year, which could mean almost half a million people won’t be allowed bank cards, have their accounts frozen and will have to depend on the goodwill of their own bank to allow them to use or open a new but extremely limited account, if at all.

I’m not sure that the likes of Revolut and Monzo mind if a new customer has been declared bankrupt, particularly where the debit card is prepaid and doesn’t allow any borrowing.

Many people who are disabled and vulnerable are entitled to claim disability benefits payable by the DWP through an account card issued to them for access to cash either from their bank or their bank account via their post office or their post office account.

However, with the imminent closure of post office current accounts in September this year, claimants will still be able to access cash using their designated bank account card from their local post office, which would most likely also house an ATM.

You are required to open a bank account or a post office account before all disability benefits are payable by the DWP.

Indeed. Most folk I know on benefits have no problems getting accounts – their problems are more to do with having enough money to put in them. This then gets further compounded by the rip-off fees they have to pay for so-called “un-authorised” overdrafts every time they can’t quite make ends meet.

The way to deal with overdraft fees is, with a decent bank, to arrange an overdraft limit. It seems the responsible way to treat your account.

Should banks simply remove the unarranged overdraft facility and require anyone who wants to borrow money to request an overdraft facility and have the request hopefully approved if they are a suitable candidate

Very true Derek, and the lengths they have to go to acquire the paltry sum they receive is pretty intrusive and intimidating.

I think when public money (yours and mine) is being distributed it is important to ensure the right amounts go to the right people.

I get what Malcolm is saying about overdraft limits, but I know people who have tried to do that but still end up overdrawn. The problem is that it is not really in the banks’ interest to keep their customers out of debt.

Indeed; many people find the almost insultingly low overdraft limit the bank affords them is inadequate, possibly only on one or two days a month but that’s all it takes for the banks to levy extortionate charges.

I agree Malcolm but if you were unfortunate enough to suffer from severe mental incapacity, completing a 49 page questionnaire, you may find, is no easy task and only adds to the mental confusion and uncertainty that already exists in the minds of people with this illness.

On the other hand, if you are in a position to be able withdraw cash using a bank accounts card, most receipts will clearly display your current balance, or if not, the option to do so is available at most ATMs.

It may not always prevent you from going overdrawn but it can be a useful deterrent to assist you in the management of your own finances and helps to protect you from extortionate bank charges.

What “insultingly low” limit? I know someone with no income from work or benefits who has an arranged overdraft with a limit of £900. Hardly low.

I do not see anyone as automatically entitled to money, and certainly not without permission. It is not the banks’ job to make supportive payments unless the customer can repay without harm – which is why I am in favour of arranged loans and overdrafts; why should a customer avoid this? I do “blame” the banks for allowing unarranged overdrafts. They will inform you by text if an impending payment will take you over your limit to give the opportunity to move funds.

I am concerned with how easy it is to obtain a so-called “payday loan” when, as with this person, there is no pay day nor any hope of repayment without further debt. £150 loan, repay £184 in a month.

The state is there to provide financial support to those genuinely in need (as well as to waste our money compensating ferry companies).

malcolm r says: Today 11:16

What “insultingly low” limit? I know someone with no income from work or benefits who has an arranged overdraft with a limit of £900. Hardly low.

I agree. I wonder, however, when that was arranged, and how anyone with no income from work or benefits manages to survive?

I do not see anyone as automatically entitled to money, and certainly not without permission. It is not the banks’ job to make supportive payments unless the customer can repay without harm – which is why I am in favour of arranged loans and overdrafts; why should a customer avoid this?

I agree with the first part of what you’re saying, but not the final bit, where you’re conflating two separate issues. No one is asking for the banks to make ‘supportive’ payments, only to behave in a more reasonable manner than their performance hitherto suggests.

No bank manager is going to agree a £900 arranged loan unless he is assured of its return within an agreed period of time.

There is however a marked difference between someone who obtains money from a bank, cap in hand, which could be due to a number of reasons not pertaining to ones health, and Incapacity Benefit which is. It is the process of obtaining that Benefit that can be a demeaning and undignified experience for people who through no fault of their own are in genuine need of financial help.

Most tax payers would, I am sure, be happy to agree for their contribution to go towards helping their fellow citizens in need, especially those, all too aware, they could one day find themselves, or their loved ones, in a similar position – but would find acquiring that help quite a daunting task.

Agreed.

I found it very demeaning when I asked for a credit limit increase on my bank credit card that I had kept low on purpose. There was a substantial amount in my current account at the time and the interrogation surprised me somewhat. If that is how they treat someone who is reasonably solvent, I dread to think how they treat someone whose finances are not in good shape.

There is something rather warped where banks are happy to dish out rather large fraud repayments when someone has done something stupid but impose unfair charges on those struggling to manage their finances.