The government has announced the creation of a new banking option that is designed for people on low income. The People’s Bank will also provide competition to private retail banks.
Should it win the General Election, Labour will introduce 11,500 branches of the People’s Bank at Post Office branches. This will see an end to the restrictions preventing the Post Office from offering current accounts.
A lack of trust
The People’s Bank is intended to provide greater accessibility for lower-income consumers at a time when trust in the banks is at an all-time low. A recent poll of 1,600 consumers by the Direct Marketing Association found that 71% of people do not trust the financial sector, and the issue of public confidence in the banks was a key theme to emerge from the Future of Banking Commission, which held it’s final select committee hearing last week.
Low income consumers ‘let down’
Energy secretary Ed Miliband said that the People’s Bank ‘speaks to people’s sense of community, and frankly, banks have let down low-income consumers.’ Mr Miliband called the Bank a ‘new deal for the low paid.’
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