Reasons why you should have a functioning bank account in the UK

There have been a lot of discussions recently about the best way to save your money. With so much uncertainty in the economy, a lot of workers are abandoning the banks for alternative money storage options. However, this might not be the best idea in the long run.

Banks have been a part of the British economy since the late 1600s, and they are going to continue to be part of the financial infrastructure for many years to come. This is because these businesses offer so much to the average worker, even more than you may realise. Let’s look at why you should have a functioning bank account in the UK.

Getting Paid

Almost everyone in the UK needs a monthly wage to pay their bills. Obviously, you earn these wages at your job, and it is up to your employer to ensure that you are paid the full amount on time. Missing one of these monthly payments could put you financially on the back foot, which means you may miss bill payments and go into debt.

Since most people in the UK are paid via their bank account, it means that most businesses will choose to pay their customers this way. The company simply transfers your wages into your account each month, and it is accessible to you almost immediately. However, it can be tricky to receive your wages if you do not have a bank account. Alternative payment methods are hard to come by, and many jobs require you to have a bank account to join their payroll.

Proof Of Transactions

Your bank account isn’t just a storage facility for your money. Every account comes with a written account of every transaction that goes through your bank in the form of a bank statement. These documents are organised monthly and will detail every payment you have made throughout the last month. This allows you to track your spending and identify any fraudulent payments that may have been made through your account.

This record works the other way too. You can use it to prove that you have made important payments to companies that may feel it necessary to charge you twice for something. In short, these statements act as evidence of your spending, and they can really help you out in a tight security situation.

Improving Your Credit Score

Your personal credit score is a quick reference guide to how reliable you are as an investment. People will look at this number when they decide to provide you with a mortgage or other type of monthly subscription service. Anyone with a poor credit score may be turned down for such privileges, which is why it is important to maintain a strong score.

As mentioned above, you will receive written proof of all your monthly transaction when you own a personal bank account. This means that you can use this statement as proof to lenders that you are a reliable investment. If you are sensible with your spending, your bank account can be used as evidence to secure you a mortgage.

Savings

In order to buy some of the more luxurious items in life, you will have to put aside some of your monthly pay check in the form of savings. Your wages should be enough to cover your essentials, such as food, rent, and utility bills. However, there are more things in life worth paying for.

A yearly holiday, a new car, or a down payment on a house can set you back a bit, and it can take you a while to accrue the money necessary to pay for these items. Setting up a separate savings account allows you to siphon off part of your pay check into a pool of money without the risk of it getting lost or stolen. Therefore, you can slowly save up for the big expenses with the help of your bank account.

Loans

Accruing savings isn’t the only way to make a large payment. A payday loan can be found from a broker like Payday UK, which works with various lenders. This can help give you the funds necessary to pay for larger financial costs; however, you will need a bank account to qualify for one of these loans.

A bank account can again prove that you are a reliable investment risk and provides the loan company with somewhere safe to put the money that you borrow. What’s more, you can set up a direct debit to make your repayments on time.

Security

There is a lot that can happen to your possessions. Forget theft for a second. Can you imagine the damage that can happen to the money stored in your house if a fire breaks out? There would be no way to recover it or prove that it existed at all. All your money would literally go up in smoke.

When storing your money in a bank, you know where it is at all times. Also, you can challenge any theft that occurs and be reimbursed for what you may have lost. Therefore, your money is always secure.

Access

Another benefit of the economy, depending on banks, is that you will always have access to your money. Every high street in the country has at least one ATM that you can use to withdraw your funds at any time. Having quick access to this money can save you in a tight situation. You may find yourself stranded and in need of a taxi. Most taxis only accept cash payments, which means you will be grateful for the opportunity to withdraw some money in a pinch.

Some other money storage solutions require you to undergo too many security protocols to gain access to your funds. By this time, it is too late. Furthermore, keeping cash around the house is no use as you can never predict how much money you will need throughout the day. It is better to be safe than sorry and keep your funds in a location where you can retrieve them quickly and safely.

Future Proofing

You have probably seen how our banking systems have changed in recent years. From chip and pin services to the ability to pay for goods on your smartphone, every new payment solution requires the use of a banking system in some way. This is because innovative companies already understand the benefits of UK banking that have already been discussed. Therefore, they are more likely to invest in opportunities that work with this system rather than something that isn’t as prevalent.

To keep up with modern payment technology, you may need to ensure that you have access to a bank account. This is especially true given the fact that the UK is slowly moving toward becoming a cashless society.

Conclusion

The British banking system may not be for everybody, but you cannot deny that it has some strong benefits for the people that use it. The UK has come a long way from cash pay packets, and these banks are able to reliably keep your money safe until you need it next. If you are still wary about the banks, read through the points above again to understand just how important it is to become a part of this system.