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i The advice on this page applies to anyone with personal debts taken out in the UK.

Banking and borrowing

Where to get a basic bank account

One of the most important things we advise our clients is to protect their money. If you’ve got a debt with the same bank that your current account is with we recommend you talk to your bank as soon as possible.


They may be able to:

  •  separate any overdrafts from your existing account
  • set up a new 'clean' basic bank account for you
  • help you to reduce your overdraft at an affordable rate and in line with your other debts

If your bank is unable to help you, then we recommend you set up a new basic bank account with a provider you don't have any debts with. If you don't do this, there's a very small chance of your money being taken from your account by your bank to pay your debts off, which could affect your ability to pay for your essential household and living costs.

A few things to remember about bank accounts

  1. Banks are allowed to use the right of set off (also known as 'right of offset' or 'combination of accounts'): If you have a personal loan or credit card with the same bank as your current account, they could take money from your bank account to pay your loan or credit card if you've fallen behind with your payments. In practice, it’s extremely rare that this would happen.
  2. An overdraft is a debt:Many people don't see their overdraft as a debt but don't fall into this trap. An overdraft is just like any other debt. In very rare cases, if the bank wants their money back, they can wait until money goes into your account and then take this to repay the overdraft.

Opening a bank account if you're in debt

We get asked a lot about how to set up a new bank account. If you need to change your bank account you need to find a bank that:

  • You're not currently banking with
  • Offers a basic bank account - these have all the same facilities as a standard current account but you don't have access to an overdraft

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Questions about basic bank accounts

What do I need to open a basic bank account?

You'll normally need a proof of identification and proof of your address.

Proof of ID includes:

  • A passport
  • A driving licence (one of the newer photocard ones)
  • A letter confirming your benefit entitlement
  • A HMRC tax notification letter

You could use one of the following for proof of your address:

  • A driving licence (a newer photocard one or a full old style one)
  • A recent council tax bill
  • A recent letter about your benefits
  • A recent letter or statement from another bank
  • A recent utility bill
  • Your TV licence

If you don't have a passport or photocard driving licence you should ask the bank what forms of ID they'll accept before you try and open an account with them.

What if the bank won't let me open an account?

Banks can't use the rating on your credit file as a reason not to give you a basic account, but they aren't under any legal obligation to give you one. They'll normally stop you having an account if you're an undischarged bankrupt (in other words, you've only just made yourself bankrupt) or there's a record of fraud on your credit file.

If you've applied for an account and a bank has turned you down, make sure they were assessing you for a basic account rather than a current account.

Do I have to change banks?

We hear lots of reasons why people don’t want to change banks, such as:

  • "It's a lot of hassle."
  • "The bank I'm with now is good to me."
  • "I've had this account for many years."
  • "I couldn't live without my overdraft."

Who you bank with is entirely up to you. However, if you’re in financial difficulty, you should try talking with your bank to resolve any issues as soon as possible. If they’re unable to provide any help, there’s a very small chance your bank will take money from your account to repay any debts you have with them, such as overdrafts, credit cards or loans.

If they take the money they aren’t obligated to return it, even if that means you can’t pay your bills. Although they’re within their rights to do this, it’s extremely rare that banks exercise this right. However, if you’re worried, changing banks will avoid this risk altogether.

Don't deal with bank account problems alone

If you have debt with your bank or you've had money taken from your account to cover a debt, please know that we can help. Our  online debt advice tool can help you put together a personal action plan in around 20 minutes. If you'd prefer to speak to someone, our advisors will be happy to assist you.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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© StepChange Debt Charity 2018