Who Doesn’t Have A Bank Account +$100 AMAZON VOUCHER GIVEAWAY!!

The following is a guest post by NatWest.


You probably have an image in your head. A rural wooden shack, a vegetable garden, some funny smells and conversation peppered with the names of Kropotkin, Bergman and Marx. These are the people who chose to live off the grid, away from regular civilisation and probably keep all their money under their mattress. How true this image is, is debatable, however you might be surprised to know that there are a lot more people than you might imagine who don’t go in for the whole bank account thing, whether by choice or not.

An article in Time magazine in November 2012 looked at this precise phenomenon and revealed that as much as one in nine American households don’t have current accounts. A lot of the time this isn’t strictly an ideological issue, it is more invidious than that – it’s a fiscal one. People with less money are less likely to open a bank account. In households with incomes of less than $15,000 a year, 28 per cent have no bank account.

Some of the reasons that Time gives for this occurrence include a lack of time to bank. With long working hours and even longer commutes some people never have a chance to see the inside of a bank, have a lack of trust in banks, and suffer a lack of financial literacy; as in some people don’t understand the costs involved in having a bank account.

In the UK the figures aren’t nearly as high; it currently stands at about 5 per cent for low-income families, down from between 20 – 25 per cent in the 1990s. Worldwide though, the figures are quite high. According to Businessweek 2.5 billion adults in the world – approximately half – don’t have a bank account. Again this appears to be predominantly a financial issue. Two-thirds of those polled said they simply didn’t have enough money to bank. In other cases it was because the banks were too far away or that it was too expensive to use them.

Surprisingly though there are some inroads being made in the way poorer nations use their money. Sixteen per cent of adults in Sub-Saharan Africa have used a mobile phone to pay bills or send money in the past year while two-thirds of adults in Kenya have received payments by phone.

If you suddenly decide not to put your money in the bank at some point in the future you might hit a few problems, some of which you might not have factored in. For instance, how would you go about paying bills? You could probably work something out with your landlord but what about electricity and heating? There aren’t too many companies who are going to except cash in hand.

Then there’s the salary issue. Unless you’re very lucky (or your business is a little unorthodox) then this will definitely cause some problems. Need the internet? You’ll probably need a bank account for that. Student loan? Same deal.

How about a credit score? It’s going to be pretty hard getting yourself a mortgage, credit card or loan without a credit history. Never having a bank account would give you the credit score of a homeless ghost (Nick Miller style).

Still even with all these issues there are some unusual characters out there who will, for reasons that are entirely their own, feel that stuffing their money under a mattress and cookie jars is better than putting it safely in a bank. To each their own.


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