When opening an account with a bank or building society, you will be asked to provide evidence of your identity and confirmation of your address. However, if you are homeless or have been living abroad and are planning to move or return to the UK, this can pose a problem.
Having no credit history in the UK and no proof of address can hinder efforts to set up a new current account, which is often necessary to enable your employer to pay your wages and access social security benefits.
Although most banks and building societies expect you to have a UK address before you can open a bank account, there are some specialist products that have been designed for foreign nationals, which could be an alternative if you do not meet the standard account criteria.
For those who have lived in the UK all their lives, having proof of residence can still be a problem if, for example, you’ve been renting a property with a partner and all the bills are in their name, if you've rented a room in a shared house and don't pay any bills, or if you are not on the electoral roll.
HSBC have recently begun to roll-out special bank accounts for the homeless in 31 major city branches across the UK. These do not require proof of address to open.
There are more than a few banks out there that offer a digital-only service – meaning they do not have any physical branch locations, with all services being provided remotely, including online, telephone banking, postal banking or (most often) via a dedicated smartphone app. To find out more about digital-only banks and smartphone banking, see our dedicated best digital-only banks and mobile banking apps page.
There are alternative methods of identification which can usually be used to open a basic bank account. A full explanation is given in this UK Government booklet here:
People claiming benefits
People in care homes/sheltered accommodation/refuge
People on probation
Foreign nationals working temporarily in the UK (whose lack of banking or credit history excludes them from being offered anything more than a basic bank account)
Some prepaid cards allow you to use them like a bank account and have your wages paid directly into your card's account, without any links to any other account you may have.
There are no unexpected bank charges and very little paperwork to fill in to get such an account. Just use it like a regular bank account – you can pay bills online and set up regular payments for everything from your gas and electric bill to your broadband.
However, be aware that many prepaid cards do not offer the same level of protection as bank accounts under the Financial Services Compensation Scheme.
Basic bank accounts allow you to pay in your wages, benefits, tax credits and state pension. They give you a cash card to withdraw your money and some offer standing orders and direct debits. Unlike normal bank accounts, they do not give you a cheque book or overdraft facility.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.