Banks have agreed to make it easier to open a bank account, to lend responsibly and to work with local schools to provide financial education after a pioneering ‘bank summit’, organised by Lambeth Council.
RBS/NatWest, London Mutual Credit Union, HSBC and the Co-op Bank attended the Town Hall event on Wednesday, part of the council’s Healthy Finance Week.
Leader of the council, Cllr. Lib Peck said: “With the average interest on a payday loan in Lambeth an eye watering 1,675%, it’s vital that people can access and manage their money. What we’ve asked the banks to do today is to work with us to ensure that residents who need and want a bank account can open one, to support our work to build financial understanding and confidence by providing financial education in every Lambeth secondary school and to back our efforts to tackle problematic debt by only lending responsibly.”
There are over 13,000 residents in Lambeth using old-fashioned Post Office cash card accounts to receive their benefits but these accounts cannot be used once Universal Credit is introduced.
Cllr Paul McGlone, Cabinet member for Finance said: “Managing a monthly payment in arrears is a challenge for people starting work and will be even more so for those used to weekly benefit payments once the Universal Credit change is made next year.
We want to work with banks to support residents because many people tell us they don’t understand a lot of what could be seen to be basic information – like how direct debits work, what interest rates mean and how to make financial decisions with more confidence.”
While some banks already offer workshops and educational activities, the council wants to start “twinning ” banks with schools across the borough so that school leavers starting work or going on to further education are better informed about finances, budgeting and financial products.
During the meeting, examples of good banking practice in Lambeth were identified that include :
• Santander make account application forms available to resettlement staff in Brixton Prison so prisoners about to be released can get an account set up.
• RBS provide Money Sense workshops in some Lambeth schools
• The local Credit Union offers an affordable ‘ payday loan’ and is working to introduce a new £50 overdraft facility for account holders
Colin Lowen of Natwest said: ” We’re all delighted to be part of this initiative and look forward to working with Lambeth Council to support the local community with their finances”