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Can banks take your money to pay off debts?

Banks and building societies can take money from  your current account to cover missed payments on other accounts you have with them. This is called the 'right of set off'.

It can also be called the 'right of offset' or 'combination of accounts'.

Should I take money out of my bank if I have debts with them?

It is rare, but any money paid into your accounts can be taken if you are behind on loan payments, credit card payments and overdrafts.

To avoid this, you should talk to your bank and tell them you are struggling to pay.

 Get free debt advice if you are worried about a bank taking money from you.

The bank may offer to:


  • Separate any overdraft from your existing account
  • Set up a new 'clean' basic bank account for you
  • Help you to keep banking with them while you pay off debts

You can choose to set up a basic bank account with a new bank if your bank is not able to help, or you would prefer not to stay with them.

Can banks take your money without your permission?

A bank cannot use right of offset to take money from your account without your permission unless:


  • The current account and debt are both in your name. This gets complicated with joint debts and joint accounts
  • The current account and debt are both with the same lender. A bank cannot take money from your account for a debt with a different company
  • The debt is in arrears. They cannot use right of set-off to take money if repayments are up to date
  • They warn you clearly in advance. They say they might use right of set-off if you do not contact them or pay your arrears
  • They take your circumstances into account. And do not see that taking the money would cause you hardship

It is rare for banks to use right of set-off. They must explain how you can avoid it happening again.

If your bank contacts you to say they may use right of set-off, this is a sign that you are in financial difficulties and you should get advice. We can help you.

Worried about debts?

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When can right of offset be used with joint accounts?

When it comes to joint bank accounts or joint debts, right of set-off can be used to transfer money:


  • From your sole bank account to debt only in your name
  • From your sole bank account to a debt you have jointly
  • From your joint bank account to a joint debt, if the same two people are named

Right of set-off cannot be used to transfer money:


  • From your joint account to a sole debt in your name
  • From your joint account to another joint account you have with a different person

Some banks say in their terms that money can be transferred between any accounts in your name. This is likely to be considered an unfair term.

Make a complaint if the bank takes money from a joint account for a sole debt.

How can I avoid money being taken from my bank account?

If you fall behind with any debts, contact your bank and tell them you are having financial difficulties. They should let you know what help they can offer you.

Think about switching your account if your bank cannot help.

They should give you four to six weeks to deal with your situation once you talk to them. This gives you enough time to set up a new account and arrange to have your wages or benefits paid into it.

You can use your ‘first right of appropriation’ to prevent the bank taking your income if you live in England or Wales

You will need to write to your bank before money is paid in. You can use our sample letter to get started. Remember to list or ‘earmark’ what the money is going to be used for (like rent or food).

They should always leave you with enough money for essential bills.

Your bank cannot use right of set-off if you show them the money is earmarked for essential living costs or priority bills.

What can I do if right of set-off has already been used?

Contact your bank straight away if they take money.

Ask them to refund some or all of it if you do not have enough to cover bills and living costs or you cannot pay priority debts.

Make a complaint if they do not do this.

I am worried about my bank using right of offset, what can I do?

Losing money through right of set-off is a warning sign.

Take two minutes to answer a few simple questions or contact us for advice.

Answer 5 quick questions to find out what you should do next.

Be honest – this will just be between us, and we will not record any of the answers you give.

Do you use credit, loans or an overdraft until your wages or benefits come in?

Have you been making minimum repayments on debts or even missing repayments on them?

Have you received any charges for late payments, or fees for your overdraft recently?

Are you currently using credit cards to cover your repayments?

Have you been using credit to pay your household bills? Or have you fallen behind on paying them?

Things are looking pretty good

No need to worry, things are looking pretty good

From what you have told us, you do not have a debt problem.

Make sure you keep on top of your money. You can use ourbudgeting guidesto get started. This will help if you are falling behind with payments.

If you′re worried about money, don′t wait to come back to us forfree and impartial debt advice. We are here to help you whenever you need us.

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You should act now to avoid bigger problems later

From what you have told us, you may have a debt problem. No need to worry, there is a lot you can do. And taking action now means you start to sort it out quicker.

You can get debt advice online at any time. We will not share your details with anyone.

Get debt help now

Or, if you are not ready to get help right now, use ourbudgeting guides.

It looks like you need help with your debts

From what you have told us, your debt has become a problem. You may be worried about this, but we can help you.

Get debt advice online at any time. We will not share your details with anyone.

We will help you to create a budget. This will show you how much you can afford to pay towards your debts. We will also help you deal with the people you owe. And we will recommend ways to start to sort out your debt.

We are here for you online 24/7. If you need to stop and come back later, that is fine.

Get debt help now

You need help with your debts

From what you have told us, your debt sounds a big problem. You are probably worried about this. We can help you.

Get debt advice online now. You can switch to the phone if you want to talk with someone. Either way, we will not share your details with anyone.

We will help you to create a budget, which will show you how much you can afford to pay towards your debts. We will also help you deal with the people you owe money to. And we recommend ways to start to sort out your debt.

We are here for you online 24/7. If you need to stop and come back later, that is fine.

Get debt help now

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