Money

Tips and tools to manage your money everyday

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Bank accounts

Do you need a bank account?

Most likely – yes. As well as giving you a safe place for wages and benefits to be paid into, you can also choose to make payments direct, bank online and keep a close eye on how much cash you have. If you receive means tested benefits you will be moving onto Universal Credit. Once you are on Universal Credit you will need an account that can make automated payments in and out as you will receive your benefits monthly in one lump sum and be responsible for paying large bills such as your rent.

Individual or joint account?

You can open an account in your own name or with other people, e.g. someone you live with.

For Universal Credit you will need a joint household account to receive payment but you can still arrange for money from this to be transferred into a single account.

Remember if you have an account jointly with someone else you are both “jointly and severally” responsible for any charges, interest, fees – this means you can end up being responsible for someone else not managing the account properly – so think carefully before deciding on a joint account.

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Choosing a bank account

Getting the right sort of account is important – questions to ask include:

  • What ID will  I need to provide (see below for more about opening accounts)
  • Is the account free to run? Avoid packaged accounts that offer extras like insurance unless you are absolutely sure that you will be better off
  • Is there a ‘buffer’ amount that will stop me taking out money if I have a small amount in there, e.g. £10
  • What fees are charged if my account goes overdrawn?
  • Are there cash machines nearby where I can get money out?
  • Where can I pay money in?
  • Can I make automated payments by Direct debit or standing order?
  • Can I use internet or telephone banking?
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Basic / Fee Free accounts

Fee free basic accounts were introduced in 2016 and are for anyone who cannot access a full current account. They will not let you go overdrawn and you may not be able to get a debit card to use in shops although you will have a cash card to use in cash machines. This means that you don’t have to pass a credit check to open the account  which is useful if you have experienced financial  difficulties in the past.

For lots of useful information about fee  free basic accounts click here

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Credit Unions

Credit Unions are non-profit community led organisations that offer access to financial services for everyone. They are also very useful if you are not able to get a full bank account and offer savings accounts, cheaper loans and often payment cards so that you can make purchases online or in shops.

To find out Credit Unions close to where you live click here

If you rent from a housing association ask if they have an in house Credit Union. They can offer safe and cheap alternatives to high street financial services

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Proof of identity

You will need proof of your identity and address to open an account. If you cannot provide what is first asked for don’t give up, talk to them about what you can provide and ask them to explain what is needed. If you don’t have official proof of your identity such as a passport or driving licence you can offer a letter from someone in authority to prove who you are, e.g. from a social landlord, DWP, minister of religion or care home / hostel manager.

Ways to improve your ID (proof of identity documents)

  • Get up to date copies of documents (bills, rates, benefit letters) – usually need to be less than 3 months old
  • Make sure all your documents show your correct name and address
  • Register to vote (remember everyone now has to register individually, click here to register online
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Running a bank account

Keeping track of your money in your account is important:

  • Helps you to plan ahead
  • Avoid bank charges if you run out of money and don’t have an arrangement to borrow
  • Avoid bank charges if you run out of money and payments have to be returned / cancelled by the bank

There are lots of ways to keep track – by post, by mini statement or balance at cash machines, over the counter at the organisation you bank with as well as online or by phone (if these options are available). With some banks you can also keep track by texts to your phones when your balance is getting low.

Ask for help to read bank statements

Around 1 in 5 adults have difficulty reading a bank statement so if you are not sure you are not alone – just ask your provider or an independent advice service like Citizens Advice and they will be happy to help.  Understanding the statement is key to keeping track of your payments in and out and knowing what money you have available so it is a very valuable skill.

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Account overdrawn and can’t pay bills?

Get help right away and make sure you claim your “First right of appropriation” if you have important bills to pay – this is a letter to the bank telling them how you want to spend money coming in to meet your essential bills – this stops them from taking money first towards their charges.

For more help check out National Debtline standard letters here  and find out more about help with debts

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