Banking, loans and cards

‘Pensioners are being frozen out of the best bank-account deals’

Older people who rely solely on their state pension are missing out on some of the most competitive current accounts, because they don’t meet the minimum-funding requirements.
Many savers have been enticed recently to competitive current accounts, with interest rates of up to 5% available at the moment – far higher than the returns paid by savings accounts.
A lot of pensioners would love to take advantage of these soaring current-account rates. But the average state-pension income of £116 a week falls short of the minimum amount that must be paid in to enjoy the best in-credit rates.
According to a study by Moneysupermarket, only two of the best-buy in-credit current accounts have a minimum weekly-funding requirement that is lower than the average state pension of £115.95 a week.
“It is great that we are seeing a fantastic number of current account offers on the market and providers upping the ante to entice savers,” said Moneysupermarket’s Kevin Mountford.
“However, many pensioners are suffering as they can’t benefit from the deals that the majority of consumers take for granted.
“The money coming in each month for someone just on the state pension is too low to unlock the best current account rates due to the restrictive minimum-funding requirements, leaving them frozen out of the best rates on the market.”
Of the leading current accounts on the market, Moneysupermarket said only TSB and Santander’s propositions were accessible to people relying on the state pension for their income.
It also highlights the wider issue that people on lower incomes often find themselves excluded from the most competitive financial deals elsewhere.
Mr Mountford said: “Providers should do more to cater to this group in other areas, too.
“For instance, many savings accounts pay interest annually, which will not help many who depend on a monthly interest boost.”