Personal Money · Friday, 4 September 2026

01 Briefing what happened

Cashing a $500 cheque and a $1,000 one costs the same flat fee. The smaller one just paid double the rate.

Personal Money 1 min 45 sources

Low-income households in Britain pay hundreds of pounds a year more than richer ones for identical goods. Much of it is not a price aimed at them. It is one cost that does not shrink, divided by a smaller sum.

$10,705

the balance a typical US interest-paying current account must hold to escape its monthly fee

The fee it escapes is 15.65 dollars a month, and the balance required rose nearly 5% in a year [5]

42%

of US households with no bank account say the minimum balance is why they have none

Banks commonly ask for 100 to 500 dollars to waive a monthly fee of 10 to 15 dollars [4]

241m pounds

the extra that low-income West Midlands households pay each year for the same essentials

Perry Barr in Birmingham averages 562 pounds a household, the second highest of any UK constituency [2]

$4 to $8

the flat charge to cash a cheque at a big US supermarket, whatever the cheque is for

Cashing one 500 dollar cheque a month there costs 96 dollars a year; at a store charging 5% it costs 300 [3]

The lead story — what happened

Low-income households across Britain pay hundreds of pounds a year more than richer ones for exactly the same goods and services. [1][2]
Researchers call it the poverty premium. In Peckham, in south London, it averages 493 pounds a year per family, and passes 600 pounds in the worst-hit parts of the capital. [1]
Across the West Midlands, an English region centred on Birmingham, it adds up to 241m pounds a year. That is the second-highest total in Britain, after London. [2]
One arithmetic fact sits under a great deal of it. Money services are usually charged per job rather than per pound, so the fee does not move when the amount does. [3]
Cashing a cheque at a Walmart or Kroger supermarket in the US costs a flat 4 to 8 dollars, and the same fee applies whether the cheque is for 500 dollars or 1,000. [3]
So a 6 dollar fee is 1.2% of the smaller cheque and 0.6% of the larger one. Nobody quoted two rates. One unchanging cost was divided by two different amounts. [3]
Banks do the same thing with balances. The average US interest-paying current account now charges 15.65 dollars a month, waived for customers holding an average of 10,705 dollars in it - a record high. [5]
The people most likely to fail that test are the people the fee then lands on. Of US households with no bank account at all, 42% say the reason is that they cannot meet a minimum balance. [4]
Energy works the same way in Great Britain. Every household pays a standing charge - a fixed daily fee for being connected, owed before a single unit of gas or electricity is used. [26]
At 53.68 pence a day, that is about 196 pounds a year of electricity charges that no amount of switching things off can reduce. A household that uses little energy carries it on a small bill. [27]
Where the fixed job is small, the gap is small. Where it is a person, a counter and a cash drawer, it is large: a cheque-cashing store charges 1% to 10%, so one 500 dollar cheque can cost 50 dollars. [3]
And where the fixed job has been engineered away, the gap closes. India built an instant payment system that is free at the point of use and carries a tiny transfer as readily as a large one. [23]

Who is involved

Fair By Design

a British campaign against the extra costs of being poor; it commissioned the research behind the 241m pound figure [2]
The University of Bristol

an English university whose researchers built the poverty-premium estimate for every UK parliamentary seat [2]
Ofgem

the energy regulator for Great Britain; it sets the daily standing charge and the price cap covering 29 million households [27]
The Consumer Financial Protection Bureau

the US consumer-finance regulator; its focus groups described a 35 dollar fee charged to cover a 15 dollar purchase [11]
The World Bank

the international development lender; it prices the cost of sending money across borders on a standard 200 dollar transfer [21]

What is pushing on this

The cost of doing the job at all High→

A supermarket charges the same 4 to 8 dollars to cash a 500 dollar cheque and a 1,000 dollar one [3]

Minimum balances as a gate Building↑

The balance needed to avoid a US monthly account fee reached a record 10,705 dollars [5]

Cheap shared payment rails Building↑

Twenty-five African countries had a live instant payment system in 2025, up from twenty [22]

Rules aimed at the gap Easing↓

The US government overturned a consumer-regulator rule meant to cut overdraft fees [12]

How it unfolded

1936 The US passes the Robinson-Patman Act, banning suppliers from giving big buyers better prices than small ones [33]
2009 Sending money across a border costs more than 9% of the amount sent, on the World Bank's count [21]
2019 US bank and credit union customers pay an estimated 15bn dollars in overdraft and bounced-payment fees in a single year [11]
2021 Tanzania taxes mobile money transfers; food eaten per person in rural households falls 10% to 18% [24]
Sept 2025 The US tax agency stops sending refunds as paper cheques, under an executive order signed that year [35][34]
This year The balance needed to avoid a monthly fee on a US interest-paying account reaches a record 10,705 dollars [5]

Where this points

Watch whether Britain's energy regulator gets every supplier to offer a low-standing-charge tariff, because that is the one place a fixed charge is being deliberately converted into a charge per unit used. [26]

The rest of the day

39 more stories on this beat.

Each with its own sources. None of these is a link to the story above.

02
Food shopping is the biggest single driver

The largest part of London's poverty premium is groceries: 39% of the affected families shop at local convenience stores rather than larger supermarkets with keener prices. [1]

Why it matters — It puts the biggest number in the study outside the financial system entirely, in a shop on a corner.
03
A Brooklyn grocer pays wholesale what chains charge retail

Alap Vora says he pays his distributor about 5 dollars for a cereal box that big US chains sell to shoppers for around 5 dollars. There are more than 21,000 independent grocers in the US, making a third of grocery sales. [33]

Why it matters — It explains the convenience-store price at the other end: the small shop is buying small too.
04
A 1936 US law against volume pricing is back

The Robinson-Patman Act bans suppliers from offering better prices to big buyers than small ones. Unenforced for decades, it was revived at the end of Joe Biden's term as US president, with lawsuits against a large drinks distributor and against Pepsi. [33]

Why it matters — It is the one rule that tries to outlaw the discount for size.
05
Prepayment meters cost 129 pounds a year more

British households on a prepayment meter pay about 129 pounds a year more than those on a competitive fixed tariff paid by direct debit. Drivers in deprived postcodes pay about 153 pounds more for motor insurance. [1]

Why it matters — Paying as you go and paying in advance are priced differently, and only one of them needs money up front.
06
British Gas pays 20m pounds over forced meters

British Gas agreed to pay 20m pounds into a redress fund to settle Ofgem's investigation into debt agents breaking into homes to fit prepayment meters. Its full package reaches 112m pounds. Across the industry, 40,000 customers had a meter fitted without permission between 2022 and 2023. [28]

Why it matters — The meter that costs more is also the one people were moved onto against their will.
07
196 pounds of electricity charges no one can avoid

Great Britain's electricity standing charge rose to 53.68 pence a day and gas to 34.03 pence, which is about 196 pounds and 124 pounds a year owed before any energy is used. The price cap covers 29 million households and was introduced in 2019. [27]

Why it matters — It is the clearest fixed charge in an ordinary household budget, and it is set by a regulator.
08
Ofgem wants a low-standing-charge option

Campaigners argue standing charges are unfair because they are a bigger share of a small bill. Britain's regulator has asked every supplier to offer at least one tariff with a low standing charge and a higher price per unit. Between October and December 2026 the average electricity standing charge is 54.83 pence a day. [26]

Why it matters — It is a fixed cost being deliberately turned into a variable one, and the money has to reappear somewhere.
09
A record 4.86 dollars to use the wrong cash machine

The total cost of an out-of-network cash withdrawal in the US hit a record 4.86 dollars: a 3.22 dollar surcharge from the machine's owner plus 1.64 dollars from the customer's own bank. [5]

Why it matters — Two flat fees stacked on one withdrawal, and the withdrawal is usually small.
10
A 35 dollar fee on a 15 dollar purchase

The US consumer regulator's focus groups described overdraft fees of 30 to 35 dollars charged to cover purchases as small as a cup of coffee. In 2019, US customers paid an estimated 15bn dollars in overdraft and bounced-payment fees. [11]

Why it matters — The fee is priced on the bank's cost of handling it, not on the size of what it covered.
11
Nobody agrees what an overdraft fee costs

NerdWallet puts the average US overdraft fee at 17 dollars including banks that charge nothing, and 27 dollars excluding them. Bankrate's survey says 26.77 dollars, 1% lower than a year earlier. [13][5]

Why it matters — The average moves by a third depending on whether the free banks are in the sample.
12
The US overturned its overdraft rule

A Consumer Financial Protection Bureau rule aimed at reducing overdraft fees was overturned by the Trump administration, even as a growing number of US banks dropped the fees on their own. [12]

Why it matters — The charge is now falling by competition rather than by rule, which makes it reversible.
13
Some banks now let a small overdraft go

Several US banks give customers a buffer, often around 5 dollars, that can be overdrawn without triggering any fee, alongside grace periods and free transfer cover. [14]

Why it matters — It is an admission that a flat fee on a tiny shortfall is out of proportion.
14
Regulator warns on consent nobody can find

The US consumer regulator published guidance on phantom opt-ins, where a bank charges overdraft fees claiming a customer agreed but cannot show proof. Under US law, no fee may be charged on cash-machine and one-off debit card overdrafts without that consent. [15]

Why it matters — The fee is only lawful with a signature, and the signature is often missing.
15
42% cannot clear the minimum

US banks commonly require 100 to 500 dollars to waive a monthly fee of 10 to 15 dollars. Of US households with no account, 42% name that minimum as the main reason. FDIC figures put 4.2% of households outside banking entirely and 14.2% partly outside. [4]

Why it matters — The cheapest account is reserved for whoever already has money in it.
16
One US bank tripled its balance test

Wells Fargo raised the balance needed to avoid the monthly fee on its Everyday Checking account from 500 dollars to 1,500. It also lifted the fee from 10 dollars to 15, or about 180 dollars a year. [8][9]

Why it matters — The threshold and the penalty moved in the same direction at the same time.
17
Two counts of the same monthly fee

Bankrate puts the average US non-interest current account fee at 5.47 dollars a month, or about 65 dollars a year, and says 47% of such accounts are free. An Investopedia summary of MoneyRates data puts the average maintenance fee at 13.95 dollars, or 167.40 dollars a year. [6][7]

Why it matters — The same fee is reported at two and a half times the size depending on which accounts are counted.
18
12 million Americans live in a banking desert

About 12.3 million people in the US live in a census tract with no bank branch within two to ten miles, and 11.2 million more are close to it. Branch numbers fell 6.6% between 2019 and 2025, adding 785,000 people to the deserts. [10]

Why it matters — Where the branch goes, the cheque casher and the pawn shop take the work at their own price.
19
Being refused an account costs money too

US banks reject applicants using ChexSystems, a reporting agency that records past unpaid negative balances. Those turned away often use prepaid cards, which typically charge 5 to 10 dollars a month plus activation. [36]

Why it matters — The alternative to a free account is a paid one, charged monthly whatever the balance.
20
Second-chance accounts trade fees for entry

Second-chance current accounts are built for people whose banking history blocks a standard account. They carry mandatory fees and fewer features, and exist to keep people inside the banking system. [37]

Why it matters — The price of getting back in is a fee that cannot be waived.
21
Having an account is not the same as using one

Households described as underbanked hold a bank account and still use money orders, cheque cashers and payday loans, usually because the account does not do what they need. [38]

Why it matters — The count of who is inside the system overstates who is served by it.
22
The US stops posting refund cheques

After 30 September 2025 the US tax agency largely stopped issuing refunds as paper cheques, following executive order 14247. More than 6 million Americans a year had been receiving one. [35][34]

Why it matters — The cheapest way to be paid is now a bank account, which is the thing the group in question does not have.
23
What a government cheque costs to cash

Cheque cashers can charge up to 1.5% on a government cheque in New York and up to 3% in California. The body running the US electronic payments network says ending paper cheques saves the US government about 68m dollars a year. [34]

Why it matters — The saving lands on one side of the transaction and the cost of the alternative on the other.
24
A wire transfer is priced per wire

The median outgoing wire transfer in the US costs 25 dollars, rising to about 45 dollars to send abroad, and the person receiving it may pay their own bank another 10 to 20. [16][17]

Why it matters — Three flat charges can attach to moving one sum, whatever that sum is.
25
The 30 cents that never shrink

PayPal charges 2.9% plus 30 cents on a card-funded payment. Apple Cash charges 1.5% for an instant transfer, with a minimum of 25 cents and a maximum of 15 dollars. [18][19]

Why it matters — A floor and a ceiling in one fee: the small payment pays the floor, the large one hits the cap.
26
Shops are charged the same shape

Card processing is quoted to shops as a percentage plus a flat amount per sale. A simple plan runs at roughly 2.6% plus 10 cents; a pass-through one at 0.4% plus 8 cents. [20]

Why it matters — The flat piece is why some shops set a minimum spend for card payments.
27
Sending money home costs 6%

Global remittances reached about 856bn dollars in 2024, with 653bn going to low- and middle-income countries. The average cost of sending has fallen from over 9% in 2009 to around 6%, and nearly half of corridors are now under 5%. [21]

Why it matters — The World Bank measures it on a 200 dollar transfer, because that is the size families actually send.
28
A domestic payment system cuts the cross-border price

Having a fast domestic payment system at either end cuts the cost of a 200 dollar remittance by 0.3 to 1 percentage point, research found. It lets non-bank providers route the last leg themselves. [21]

Why it matters — Nothing about the transfer changed except how many hands it passed through.
29
Tanzania taxed the transfer and the food fell

A World Bank working paper studied Tanzania's 2021 levy on mobile money transfers. Rural households, who have the fewest alternatives, cut food eaten per person by 10% to 18%. [24]

Why it matters — A charge added to the channel poor households use most is not a small charge to them.
30
The most common reason women have no account

Across developing countries, the barrier women without an account cite most often is not having enough money to open one, followed by the cost of fees. Some 73% of women in low- and middle-income economies now hold an account, up 7 points since 2021. [25]

Why it matters — The stated obstacle to holding money in a bank is not having enough of it.
31
Fast payments went from 2% to 45%

A World Bank study of eleven countries in Latin America and the Caribbean found instant payments accounted for 45% of all digital payment volume in 2024, up from 2% in 2017. Many of those systems were built on India's example. [23]

Why it matters — The cost of moving a small sum fell far enough that people started moving small sums.
32
Account ownership went from half the world to four fifths

The share of adults worldwide with a payment account rose from 51% in 2011 to 79% in 2024. In 2025, 25 African countries had a live domestic instant payment system, up from twenty. [22]

Why it matters — The fixed cost of an account fell far enough for a billion more people to clear it.
33
Fund minimums sort investors by size

Mutual fund minimum investments commonly run from 500 to 3,000 dollars. Separately managed accounts usually start around 100,000. Hedge funds often ask 100,000 to 1m dollars and require investors with a net worth above 1m. [39][40][41]

Why it matters — Each tier is a different product, and the ladder is climbed with money rather than knowledge.
34
A minimum at both ends

Minimum opening deposits on US savings accounts run from nothing to 100 dollars or more, and many carry an ongoing minimum balance too. [45] Some funds then charge a separate account fee if a holding falls below their stated minimum. [42]

Why it matters — Size decides entry at the door and again once you are inside.
35
Credit cards move from annual fees to monthly ones

Monthly credit card fees were long confined to cards sold to people with poor credit. Several US fintech firms now charge them, from 3.99 dollars a month, nearly 48 a year, up to 12.99, nearly 156 a year. Unlike interest, the fee is owed whether the card is used or not. [43]

Why it matters — A charge for holding the card falls entirely on people who could not get a card without one.
36
Paying in instalments is now a 157bn dollar market

US buy-now-pay-later providers issued about 156.7bn dollars of credit in 2025, half of it in the four-instalment plans, on Federal Reserve estimates. More than 60% of the total carried no interest. [44]

Why it matters — Splitting a purchase into pieces is how a large price is met by a small budget.
37
Smaller packs, and who they hit

Shrinkflation - the same price for a smaller pack - hits lower-income households hardest because they spend a bigger share of their budget on essentials. A 2025 YouGov survey found 80% of UK adults concerned, up from 75% in 2023. France requires shops to display unit prices and to say when a pack has shrunk without a price cut. [29]

Why it matters — The unit price is the number that would show it, and it is the number usually missing.
38
A quantity discount, written out

A wholesale t-shirt price falls from 7.50 dollars a unit under 48 pieces, to 7.25 for 49 to 72, to 7.00 above that. Sellers offer it because moving more units costs them less per unit. [30]

Why it matters — It is the same mechanism as the bank minimum, priced openly and without anyone objecting.
39
The bulk price needs money on the day

A 6 dollar small pack can be easier to buy before payday than the 25 or 30 dollar bulk version that is cheaper per unit. A 50 dollar warehouse club membership works out at 4.16 dollars a visit for a monthly shopper. [31]

Why it matters — The cheaper price per unit is only available to whoever can pay the larger total today.
40
Buying big can also lose money

Bulk buying lowers the price per unit but raises the risk of spoilage and the need for storage, and can cost more overall on items that go off or go unused. [32]

Why it matters — The discount for size is real, and it is not free.

02 Lesson why it matters

The charge does not shrink when the amount does

Serving a small sum costs a business nearly as much as serving a big one, so one flat fee is a far higher rate for whoever has less.

The twist

The higher rate on small money is made by arithmetic rather than by a decision - one unchanging cost, divided by a smaller amount - which is why no rule against unfair intent can reach it.

How it works

Serving one customer has a cost that barely changes with the size of the sum
So the seller charges a flat fee, or sets a minimum, or bills per day
A flat fee is a small share of a big amount and a large share of a small one
Whoever has less money moves it in smaller pieces, more often
So the rate climbs as the amount falls, and nobody ever set two rates

Where you've seen this

Shipping

One parcel costs many times more per kilo than the same goods inside a full container

Going to court

A 400 pound dispute can cost more to bring than it is worth, so small wrongs go unenforced

Medicines

A drug costs roughly the same to develop for 500 patients as for 5 million, so rare diseases wait

Farming

An organic certification costs a small farm the same fee as a large one, which is many times more per field

The catch

The floor is a cost, not a law of nature. Where the fixed job gets automated or shared, it collapses - India's instant payment system moves a tiny sum for nothing at the point of use.

And the whole of it

Nobody here is quoting two prices. The shop, the bank and the energy supplier each name one charge, and each is looking at what the job costs them to do. The person paying is looking at what is left of a small sum, which is a different number, and almost nobody in the chain ever sees both.

03 Truth what's really going on

What is really going on

A large part of the extra that low-income households pay is not a price aimed at them; it is one fixed cost of doing a job, divided by a smaller sum.

Why it works on us — A flat fee sounds like fairness because everyone is charged the same number, and the share it takes only appears if you divide it by your own balance, which almost nobody does.

Who gains

Cheque-cashing shops and prepaid card sellers — The charge is set per cheque or per month, so it earns the same on a 200 dollar pay cheque as on a 2,000 dollar one, and a cheque-cashing store can take up to 10% of the value. [3][36]
Banks with high balance thresholds — The 15.65 dollar monthly fee on a US interest-paying account disappears at 10,705 dollars, so it collects almost entirely from the accounts holding least. [5]
Large supermarket chains — A Brooklyn grocer says he pays his distributor about 5 dollars for a cereal box the chains sell to shoppers for around 5 dollars. [33]
Energy suppliers in Great Britain — The standing charge is owed whether or not a household uses any energy, so that part of the revenue does not fall when usage does. [27]
Governments taxing transfers — Tanzania's 2021 levy raised revenue from mobile money, the channel with the widest reach and the fewest substitutes. [24]

Who pays

Households in Perry Barr and Ladywood, Birmingham — An average 562 and 540 pounds a year each, with about 9.8m pounds leaving Ladywood annually, more than any other UK constituency. [2]
US households that cannot hold a minimum balance — Banks ask 100 to 500 dollars to waive a 10 to 15 dollar monthly fee, and 42% of unbanked households name that minimum as the reason they have no account. [4]
Rural households in Tanzania — Food eaten per person fell 10% to 18% after the transfer levy, and food insecurity rose. [24]
Low-energy households in Great Britain — About 196 pounds a year of electricity standing charge lands on a small bill and a large one alike. [27]
People in the US paid by cheque — Cashing one 500 dollar cheque a month at a supermarket costs 96 dollars a year, and 300 dollars at a store charging 5%. [3]

What nobody knows yet

Open questions from across today’s stories — ours included.

01

How much of the poverty premium is unavoidable cost and how much is pricing aimed at people with no alternative.

The University of Bristol work for Fair By Design totals the gap by constituency - 562 pounds in Perry Barr, 493 in Peckham - but publishes no split between the two causes, and neither figure separates them. [1][2]
02

What the average US overdraft fee actually is.

NerdWallet reports 17 dollars including banks that charge nothing and 27 dollars excluding them; Bankrate's survey says 26.77 dollars; an Investopedia summary says 33.58. All four are current and none is wrong. [13][12][7]
03

How many people in the US have no bank account.

Two accounts of the same FDIC survey both give 4.2% of households, then convert it to about 5.6 million people in one and about 5.9 million in the other. [4][3]
04

What a typical monthly current account fee costs.

Bankrate puts non-interest accounts at 5.47 dollars a month and interest-paying ones at 15.65; an Investopedia summary puts maintenance fees at 13.95. The gap is which accounts are counted, and no source reconciles them. [6][5][7]
05

Whether ending US paper refund cheques leaves the unbanked worse off.

More than 6 million Americans a year were receiving one, and nobody has counted how many will end up paying a cheque casher or a paid tax preparer instead. [34][35]
06

Whether fuel poverty in the West Midlands fell or the measurement changed.

Government figures for 2023 put the region at 16.7%, the highest in England; figures released in March put it at 10.9%, in a report that also says there has been little change. [2]
07

What British Gas's settlement works out to per household.

The company's package reaches 112m pounds and 40,000 customers across the industry had a prepayment meter fitted without permission, but the payments are not broken down. [28]

04 Hope carry this

In 2011, about half the world's adults had an account that money could be paid into. By 2024 it was 79%.