Lloyds backs free banking – and has “absolutely no plans” to change Banking Charges

Published on 5 December 2016 by Raffick Marday

Lloyds backs free banking – and has “absolutely no plans” to change Banking Charges

In an admission last month, new chairman of Barclays Sir David Walker admitted that “in principle” he favours charging for bank accounts and services.

According to Sir Walker, free bank accounts led to the recent mis-selling of financial products in the UK banking industry.

He branded the PPI scandal and other mis-selling episodes, such as interest rate swaps to small companies, as “the consequence of not charging for bank accounts”.

“Because banks are not charging, it drives them inexorably into this sort of position,” he insisted, implying that Barclays could put a stop to free banking in a bid to clean up the industry.

Customers at Lloyds Banking Group, however, are shielded from what could come as a blow to cash-strapped Brits.

Rejecting calls for the end of free banking, the head of Lloyds’ retail division confirmed it had “absolutely no plans” to start charging for in-credit current accounts.

Alison Brittain told the Mail on Sunday that putting an end to free banking would do little to improve the banking industry’s poor reputation.

“I think it would be a very difficult thing for a regulator to change, or for one bank to change, to say, 'Actually we are going to charge you for your account.'

“I don’t think the British public would welcome that innovation and I don’t think it would enhance the reputation of the banking industry,” she said.

Stating that she could remember the “sigh of relief” that accompanied the introduction of free banking, she added:

“Can you imagine the state of mourning the country would go into if it was removed?”

Lloyds, which is Britain’s biggest current account provider and 39% owned by the taxpayer, assured the public that it was committed to keeping in-credit accounts free of charge.

Anyone looking to switch bank accounts – perhaps to avoid current account fees – should make sure they compare the market to aid their decision.

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