More than four million banking customers benefitted from fee-free basic accounts during the opening six months of 2016, according to Government figures. But if you've a basic account with Lloyds or Royal Bank of Scotland (RBS) that you opened before the start of the year, you may still be paying a fee and should consider upgrading or switching.

Seven of the nine major UK banks – Barclays, Clydesdale and Yorkshire Bank, Co-op Bank, HSBC, Nationwide, Santander and TSB – have ensured that all basic bank accounts held by their customers meet a voluntary agreement that was struck with the Government in 2014 to offer fee-free banking by the start of this year.

As of 30 June, 4.1 million of the 7.9 million UK customers with a basic bank account had products that met the new criteria.

However, many Lloyds customers and some RBS customers who opened their accounts before 1 January 2016 may find themselves still being hit by additional fees and charges, as these banks have not automatically moved those with old accounts to products that meet the new standards.

Research published today by the Treasury found that 95% of Lloyds' basic banking customers have accounts that don't meet the voluntary terms – the research also found that 8% of RBS customers with basic accounts aren't benefitting from the optional terms.

Lloyds says it's not automatically updating customers' accounts, but that all basic banking customers have been contacted by letter giving them the option to change their accounts to a newer fee-free product.

A Lloyds spokesperson added that the bank chose to contact customers directly as some of its older products have features such as cashback that are not available with newer products that meet the voluntary agreement.

A spokesperson for RBS said: "We continue to transfer legacy accounts which would also benefit from our fee-free basic bank account."

Check out our Basic Bank Accounts guide to find the account that best suits your needs.

What does the voluntary agreement consist of?

An agreement was reached in September 2014 that all of the UK's major banks would make sure that all basic bank accounts opened after 1 January 2016 were free of fees.

However, while banks were able to move old account holders to basic accounts that were consistent with the voluntary agreement, they were not compelled to do so.

Most basic bank accounts opened before January 2016 used to charge an 'unpaid transaction fee' on direct debits and standing orders leaving the account or for payments when the account didn't have money in it.

These charges were uncapped and there were cases of up to £35 being charged per unpaid item – often pushing account holders into unauthorised overdrafts.

Customers who have opened basic accounts after January 2016 with any of the nine major banking groups can no longer be charged for daily transactions, unpaid payments or overdrawn balances.

What does the Treasury say?

Simon Kirby, Economic Secretary to the Treasury, said: "Ensuring consumers have access to the financial services they need is a vital part of our plan to build an economy that works for everyone."

He added: "There is still more to be done and I am determined to work with the industry to boost financial inclusion and make sure people have the resources they need to manage their finances."

Why would I need a basic bank account?

A basic bank account is designed specifically for those with poor credit scores who can't get a regular bank account. Essentially it's a place where you can store money without having overdraft facilities or in-credit interest.

The major providers will all give you a debit card, so you can use this to pay bills and set up direct debits.

You don't have to have credit problems to open a basic account, so it may be an account to consider if you're looking for a simple product that can help you manage money and won't allow you to go overdrawn.

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