Almost half of charities have experienced banking issues in the past year, a major survey by the Charity Commission has found.
Of about 2,500 trustees surveyed by the regulator, 42 per cent said their charity had experienced poor service from their banks in the past 12 months.
The survey found 32 per cent of respondents said they faced issues when trying to update their charity’s contact details or signatories and 18 per cent had difficulty trying to open a new bank account.
The survey, carried out in February among trustees on the Charity Commission’s register, also found that 15 per cent of respondents found it challenging to comply with the identity requirements set by their bank and 14 per cent found it difficult to understand what their bank required of them.
Researchers found that 6 per cent of those polled said their charity’s account had either been frozen or blocked over the past year. A further 7 per cent of respondents added that their bank had lost their records.
The Charity Commission and the two other UK charity regulators called for major UK banks to improve services for voluntary organisations last year, amid a series of sudden account freezes and closures affecting charities.
The commission said today it was renewing its call for urgent action to be taken by the UK banking sector.
The regulator warned that inadequate banking services can lead to unsafe banking and financial practices such as the use of trustees’ personal bank accounts to meet financial obligations, which goes against the commission’s guidance.
It can also have a longer-term effect on the morale of volunteers, the regulator said, adding that anecdotal evidence it has heard suggests that some trustees have resigned over frustrations related to banking service disruption.
The regulator also said these issues can create risks to the provision of charitable services, resulting in charities being unable to meet financial obligations, such as paying staff.
One charity, The London Chamber Orchestra Trust, previously told Third Sector that it suffered severe staff losses after it was unable to pay employees due to banking issues.
Helen Stephenson, chief executive of the Charity Commission, said: “I’m shocked, but not surprised by these new figures, which offer undeniable evidence of the extent and impact of the appalling service charities receive from some banks.
“It is simply not good enough that volunteer trustees, who are giving of their free time to serve society, are faced with such unnecessary challenges in managing their charities’ money.”
Stephenson added that the regulator had been working behind the scenes with banks to improve their services for charities, but that she has been “disappointed” by their response so far.
She said: “I hope this new research sends a message to the chief executives of high street banks that change is needed now.”
The regulator said that it will publish the full survey findings later this spring.