Do Bank Accounts Help Families to save? Evidence from the United Kingdom

Katie Fitzpatrick, U.S. Department of Agriculture (USDA)

I use large increases in bank account ownership rates created by an electronic transfer mandate in the UK Child Benefit program to examine the causal effect of account ownership on the accumulation of financial assets. I find that bank accounts increase the probability of owning at least £10 of savings for less educated families with children. I also find some increases in the upper tail of the asset distribution for these families. These findings, however, are not robust. I conclude that transitioning unbanked families into the financial system is unlikely to substantially increase their level of savings.