In the UK, there are more than a million individuals who have been denied a bank account. In this discussion, we will explore alternative methods for saving and managing your money.
While access to bank accounts is increasing globally, there remains a significant portion of the population in the UK who are unbanked. This could be due to losing trust in banks or being denied a bank account.
Fortunately, there are alternative avenues for saving and managing money, which we will outline in this article.
Exploring Alternatives to Traditional Banking
Crypto
Crypto is a digital currency that can be acquired and traded through online exchanges. It enables peer-to-peer transactions worldwide, often without fees associated with global banking transfers.
However, it’s essential to note that Bitcoin is still in its experimental phase and its value tends to fluctuate.
Credit Unions
Credit unions have gained prominence in countries like Ireland, the USA, and Australia but haven’t gained as much traction in the UK. Credit unions operate by allowing members within a shared local community to save and borrow money from each other.
These financial co-operatives are not-for-profit, owned and controlled by their members, which means there are no external shareholders involved. If a credit union generates any profit, those funds typically stay within the community.
In the UK, there are over 400 credit unions regulated by the Financial Services Authority and covered by the Financial Services Compensation Scheme (FSCS), ensuring the safety of the first £85,000 of savings.
Safes or Safe Deposit Boxes
This approach harks back to ancient times and involves physically storing money, only slightly more secure than hiding it under a mattress or in an old sock. While you retain full control over your money, there are increased security risks associated with this method.
Assets
Investing your money in assets allows you to safeguard against inflation, which wouldn’t be possible by simply storing cash in a safe. Assets can include items such as fine art, jewelry, cars, or anything you believe will appreciate in value over time.
E-Accounts / Digital Current Accounts
Most e-accounts or digital current accounts come with a Mastercard® debit card that is widely accepted wherever traditional bank cards are used. The key difference is that these accounts do not offer credit; you must top up the account with funds before making purchases.
For some individuals, this feature provides peace of mind, ensuring they won’t spend more money than they actually have.
Overview of Alternative Banking Options
The aforementioned options serve as examples of how one can navigate traditional banking limitations.
While not all of these alternatives may be suitable for everyone, it’s worth considering that alternative banking options can offer crucial solutions to those who have decided to distance themselves from mainstream banks or have been rejected when attempting to open a new account.
Suits Me®
Another way to enjoy many benefits akin to traditional banking without actually having a bank account is through a membership scheme like Suits Me®, which offers a Mastercard® card. This card can be used in regular establishments, and it also provides online banking-like features.