Up to nine million consumers stand to benefit from the launch by nine major UK banks of fee-free basic accounts.
The accounts will be available to anyone who doesn’t already have a bank account, is ineligible for a standard current account or who can’t use their existing account due to financial difficulty.
The 1 January launch follows last Christmas’ landmark agreement between the government and the banking industry to establish new basic bank accounts that will end bank charges if a direct debit or standing order fails.
The changes will remove the risk that basic bank account customers will be forced into overdraft due the imposition of usurious financial penalties.
Basic bank account customers will now also be offered services on the same terms as other personal current accounts that the banks provide, including access to all the standard over-the-counter services at bank branches and at the Post Office, and access to the entire ATM network.
Economic Secretary Harriett Baldwin says: "Making sure that everyone in Britain has access to basic banking and financial services is at the heart of our long term plan. This is a key step forward in ensuring that our banking industry works for everyone."