Around 1.2m Britons blocked from opening bank account cough up extra £485 a year

Number of unbanked people falls to 1.2m in 2018 but they have to pay up extra £485 extra each year in “banking poverty premium” for bills and basic services, said the latest report from Pockit.

Pockit which is a prepaid Mastercard that acts like a current account because customers can pay in wages and benefits, revealed the impacts of not having a current bank account.

These britons are reportedly missing out on deals and discounts for their utility and mobile phone bills among other things because of their inability to access a bank account.

It analysed official data and pricing information to calculate the banking poverty premium figure. The company looked at the interest on a 52-week loan of £300 for utilities , and said the average annual cost for all these totalled £1,118 for people with a bank account. For unbanked individuals this figure rose to £1,603.

In one example from the report, Pockit found two of the UK's three largest broadband providers, BT and Virgin Media, offered a "super line rental discount" if you paid by direct debit.

Even though the number of people without basic banking facilities has fallen from 2.5m to 1.2m in around two decades, the UK government said last month “this is still 1.23 million too many”.

People included in the 1.2m are migrants who cannot provide proof of UK address or have poor credit rating.

"For many of us, having a bank account is a basic fact of life," said Pockit boss Virraj Jatania.

"Yet the unbanked face a banking poverty premium which can put a real strain on their finances."