One in five people no longer trust banks to keep their money safe, according to a report from Which?.

The banking sector appears to be losing the trust of its customers as fast as the value of its shares, a survey from Which? has found.

Over a third of people (37 per cent) think that banks cannot be trusted to act in the best interests of the UK economy, while 21 per cent do not trust banks with their money.

Which? personal finance campaigner, Doug Taylor, said: “The sword of Damocles is hanging over the banking sector. The message is loud and clear – people think the banking system needs to be reformed.

“Surely with such a ground swell of public feeling, it’s time that the banks, Government and regulators sat up and took note? People are angry and they need answers, fast.”

“This survey is designed to generate headlines but does nothing to enlighten or inform the urgent debate about the future of financial services.

“It needs to be remembered that Britain’s banks routinely process millions of transactions successfully every day and no bank has needed to use the industry-funded safety net of the Financial Services Compensation Scheme to keep savers’ money safe.

“Banks have taken responsibility for their part in current global financial difficulties. The BBA looks forward to Which?’s contribution to these substantive discussions.”

The poll also showed over eight in ten (84 per cent) of people think the banking system needs to be reformed.

Lending practices are clearly blamed for some of the current troubles. Almost nine in ten people (88 per cent) agreed that financial institutions have encouraged excessive borrowing, while 87 per cent felt that banks should make better checks that people can afford to repay loans before they agree them.