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Free banking 'could disappear'
22/02/2007
UK banks are likely to introduce charges in the near future for current accounts and other services, according to an industry analyst.
A research firm predicts that banks will bring the UK in line with the rest of the world by placing fees on a number of their products in order to meet potential refund costs for customers looking to claim back overdraft charges.
Future regulatory changes to the amounts banks can penalise people and businesses which go overdrawn will probably result in many of the major groups imposing charges on standard products within the next two years, claims Defaqto.
"The first major provider to introduce charges for all customers is going to take a lot of flak but it is likely that the majority of the main providers will then follow," comments David Black, head of banking at the financial research business.
He added: "I would then expect to see a significant increase in account switching as well as many people closing their secondary accounts."
Defaqto forecasts that banks are likely to impose either a monthly fee on current accounts or calculate pay-as-you-go charges based upon how often and for what purpose an account is used.
A research firm predicts that banks will bring the UK in line with the rest of the world by placing fees on a number of their products in order to meet potential refund costs for customers looking to claim back overdraft charges.
Future regulatory changes to the amounts banks can penalise people and businesses which go overdrawn will probably result in many of the major groups imposing charges on standard products within the next two years, claims Defaqto.
"The first major provider to introduce charges for all customers is going to take a lot of flak but it is likely that the majority of the main providers will then follow," comments David Black, head of banking at the financial research business.
He added: "I would then expect to see a significant increase in account switching as well as many people closing their secondary accounts."
Defaqto forecasts that banks are likely to impose either a monthly fee on current accounts or calculate pay-as-you-go charges based upon how often and for what purpose an account is used.