The end of free UK current accounts?

The end of free checking gathers pace.

On 24 May, Bank of England executive director for banking supervision Andrew Bailey said that the "myth" of free banking enjoyed by customers when not overdrawn made it hard to link costs to products and services received.  UK current account customers will not warm to his argument or its likely implications but the High Street banks will welcome the argument to end free checking if-in-credit.

It is a trend already being endured by customers in Ireland. If you think that the banking crisis was bad in the UK, spare a thought for customers across the Irish Sea. Following a sector wide crisis in 2008 – the cost to the Irish taxpayer so far is about €70bn, give or take - six Irish owned banks have become two so called ‘pillar banks’. The big two (pillar) banks left standing – Bank of Ireland and Allied Irish Banks - are now rewarding taxpayers for their support by ramping up fees for everyday banking for a sizeable proportion of the country.

Bank of Ireland kicked things off by raising fees affecting almost one-half of its 1m customers in March. AIB has come out in sympathy and will follow suit with the end of universal free checking from 28 May. Only Royal Bank of Scotland-owned Irish subsidiary, Ulster Bank, now offers universal free current accounts. It does not however rule out following Bank of Ireland and AIB.

Ulster Bank spokesperson Debbie McCaughey said:

"I can confirm that Ulster Bank does not charge a monthly fee on standard current accounts. As with all our products and services, we keep our current account offering under continual review."

So we now have the irony of the UK government bailed-out RBS Irish subsidiary standing to win over account switchers from the two Irish government-backed lenders, Bank of Ireland and AIB. There is one further irony. Bank of Ireland has not (at least not yet) ended universal free if in credit current accounts for its customers based in Northern Ireland.

In fairness to Bank of Ireland, a lot of its customers can get around the monthly current account charges. If, for example, they deposit at least €3,000 into their current account and make nine debit payments from that account using the telephone or online banking over a three month charging period, they will avoid charges. Students and customers aged over 60 are also exempt. In addition, customers who maintain a permanent credit balance of at least €3,000 (a relatively small percentage of clients) qualify for free banking. Customers not qualifying for free banking will pay €0.28 per transaction or a flat fee of €11.40 per quarter for up to 90 transactions with excess transactions charged at €0.28 each.

AIB’s fees strategy is worse – much worse. AIB spokesperson Helen Leonard told me that the fees change “is driven by the need to enhance cost recovery across all AIB businesses, including the provision of money transmission services, the cost of which is significant.” So from 28th May AIB will seek to recover some of the losses it incurred following the crash by imposing current fees for customers who do not maintain a minimum daily credit balance of €2,500 for the full fee quarter on a personal current account.That will take in 60 per cent of its current account customer base. The 40 per cent of exempt customers will, in the main, be the other exempt customer categories: students, recent graduates and clients aged over 60. The 60 per cent of AIB customers affected will be charged €0.20 per debit card transaction while writing a cheque or withdrawing cash at an AIB branch will cost €0.30 per transaction.

In a statement, Bernard Byrne, director of personal and business banking at AIB, said:

"Free banking offerings across the industry have changed significantly in recent times. While this was a difficult decision to make, nonetheless it is a necessary one if we are to continue to create the conditions in which we can become a strong and viable entity again."

The fees bombshell for Irish bank customers follows an incessant stream of bad news in the local banking sector. Around 6,000 banking staff in Ireland have left the industry in the past three years. Thousands more are set to follow with AIB looking to shed another 2,500 jobs; Bank of Ireland will let up to another 1,000 staff go under a voluntary redundancy scheme agreed with trades union The Irish Bank Officials Association.

Ulster Bank is also bloodletting and will lay off 950 staff in the short to medium term.UK High Street lenders will be watching intently to see if Bank of Ireland and AIB can make the current account fees stick.With such limited competition on the Irish Main Street, there is every chance that Irish customers –or at least those who do not switch to Ulster Bank - will just grin and bear it.

In the UK, there are already 10m chargeable current accounts, with customers paying an average of £185 in fees per year.That is already worth big bucks to UK banks: about £1.8bn in fees last year across the sector.But such accounts are termed packaged accounts (or added value accounts, as banks prefer to call them) and typically offer a bundled range of incentives such as mobile phone insurance and car insurance, other preferential financial services including overdraft, personal loan or mortgage, as well as non-financial products and services.

There were approximately 54m active current accounts in the UK in 2011 and packaged current accounts made up about 17 per cent of the UK retail banking market. The number of charged for current accounts on offer in the UK (69) has more than doubled from the 33 on the market just five years ago and since late 2009 has exceed the number of free in-credit current accounts on the market. Thus far, no UK bank has gone for broke and made the decision to start charging for all current accounts for fear of losing market share. With encouraging noises off from Andrew Bailey – and a bank sector enthusiastic about finding new ways to charge for services currently not charged for - that day may not be far off.

Douglas Blakey is the editor of Retail Banker International.

Bank of Ireland: Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

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Why gender became the ultimate forum for self-expression

Gender identity is now embedded in many people’s self-perception, as well as in day-to-day bureaucracy.

In November, the British high-street bank Metro announced that it was expanding its gender and title options. Customers could now register as “non-binary” rather than male or female, and as “Mx” rather than Miss, Ms, Mrs or Mr. In some ways, this development parallels the rise of Ms in the 1970s, which was popularised by feminists who wanted a title that didn’t identify women by their marital status. In practice, Ms marks women by their political affiliation instead (if you’re talking to a Ms, you’re probably talking to a feminist) but, even so, its first intention was to conceal rather than reveal information.

Mx does something different. To declare yourself a Mx is to disclose something about yourself: that your identity is outside what has become known as “the gender binary”, and you are neither man nor woman but something either in between or entirely other. This is a statement about who you are, and it comes with an implicit understanding that not being able to make that statement – or not having it recognised – is damaging. As the father of one gender-non-binary teenager told BuzzFeed UK: “When . . . you don’t identify as male or female and you only see those two boxes, then you don’t see yourself there . . . You are absent. That must hurt, and that’s what makes me angry.”

While users of Ms hoped that their title would supersede the ranking of spinsters and matrons, Mx relies for its meaning on the persistence of alternatives. You can only be non-binary if there’s a binary against which to define yourself. It is now recommended practice at some US universities for students to declare their preferred pronouns, and mandatory that these should be observed by others. Failure to do so is considered more than a breach of etiquette: “misgendering” is looked on as an act of bigotry, even a kind of verbal violence. This use of gender as self-assertion has an obvious appeal to teenagers and young adults as a parent-baffling subculture, but it starts much younger, too, with a small but growing number of primary-age children announcing that they are trans.

On one of its covers in 2014, Time magazine famously described transgender activism as “America’s next civil rights frontier”, but the proliferation of gender identity is at least as much a consumer choice issue. This was also the year that Facebook introduced its “custom” gender options, though it would perhaps be more accurate to describe them as “expansive presets”. Users can choose anything from “agender” to “two-spirit” via “bigender”, “gender questioning” and “transmasculine”, but what they can’t do is subvert the system by selecting an unapproved option. A feminist wishing to register her objections to the class structure of gender by typing in the word “oppressive”, for example, would be stymied here. However diversified gender identity becomes, it is a precept that everyone has one (if your identity and your body “agree”, you are said to be cisgender).

For some, asserting their identity is enough. For others, aligning their presentation with their sense of self will involve altering their appearance. At the least invasive level, that might demand cross-dressing. A natal female might choose to “bind” her breasts, flattening them to achieve a more masculine silhouette. Many seek prescriptions for opposite-sex hormones. At the most extreme, a trans individual will opt for surgical removal of their secondary sexual characteristics and gonads (more rarely, for surgical construction of opposite-sex genitalia), coupled with a lifetime of hormone replacement therapy.

Hormonal and surgical treatments have been possible only since the mid-to-late 20th century, and for many who choose them, these alterations prove life-changing in a positive way. But beyond the confines of the National Health Service, a consumerist edge to treatment becomes more obvious. There are doctors specialising in private transition medicine whose websites include statements such as “the only person that can actually diagnose [gender dysphoria] is the person living with the feelings”. In other words, the prescription is based not on a doctor’s medical judgement of the patient’s needs but on what the patient asks for (and is willing to pay for).

Plastic surgeons promise to transform transgender patients from “caterpillars” into “beautiful butterflies”, holding out the prospect of becoming one’s “true self”, in the same way they have long sold boob jobs and liposuction to women.

Not everyone accepts this brave new world. For conservatives in the United States, trans issues have become the next battle in the culture wars, and Republican politicians have introduced “bathroom laws” that would legally compel trans men and women to use toilets or changing rooms in line with their birth sex. Gender identity was an issue in last year’s US presidential election; a Tea Party-supporting talk-radio host tweeted: “If you want a country with 63 different genders, vote Hillary. If you want a country where men are men and women are women, vote Trump.” This vehement rejection of gender self-identification creates its own kind of identity politics.

That Donald Trump said that Caitlyn Jenner (the former Olympic decathlete whose transition became public in 2015) would be free to use “any bathroom she wanted” at Trump Towers did little to stop the perception that a vote for Trump was a vote against gender nonconformity. And, in some ways, Trump’s acceptance of Jenner’s right to use the ladies’ lavatories is not wholly at odds with the idea of a world where “men are men and women are women”: it’s just that some of the feminine people were born male and some of the masculine ones were born female. It is unclear what Trump’s presidency will mean for trans rights, but whatever happens in America will influence gender ideology worldwide.

Threats to legal abortion and equal marriage could strain some of the alliances within the trans, LGBT and feminist movements. A trans woman who has undergone surgery is in a very different situation from a male who identifies as a woman but does not want any treatment. A gay, lesbian or bisexual person who is discriminated against for their sexuality does not experience the same oppressions as a trans person (it is an article of faith that gender identity and sexuality are separate things, although in practice the division is not that neat). The political priorities of women who are victimised because they are female will not overlap perfectly with the priorities of transgender women – some of whom complained that the “pussy hats” and signs referring to female genitalia on the anti-Trump women’s marches in January were “exclusionary”.

Gender identity is now embedded in many people’s self-perception, as well as in day-to-day bureaucracy. But the messy relationship between sex and self is not going to be settled imminently.

Sarah Ditum is a frequent contributor to the New Statesman

Sarah Ditum is a journalist who writes regularly for the Guardian, New Statesman and others. Her website is here.

This article first appeared in the 16 February 2017 issue of the New Statesman, The New Times