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Basic bank accounts for Housing Benefit and Council Tax Support customers

Most banks now provide basic bank accounts that give access to limited banking facilities. These accounts can be set up for people who would not normally get a current account.

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What are basic bank accounts?

Generally speaking these accounts allow you to receive your income and withdraw cash from cash machines but do not allow you to have an overdraft facility, cheque book, debit card or credit card.

Some do allow the issue of Solo or Visa Electron cards that can be used to buy goods in shops.

Most Basic Bank Accounts are credit scored and this means that you may be eligible to upgrade your account to a current account at a future date.


Why have a basic bank account?

We pay most of our private tenant Housing Benefit (HB) by Direct Credit (BACS). To get these payments you need a bank account. Direct Credit has many advantages such as:

  • it pays HB directly to your bank account with no need to wait for a cheque to clear.
  • it is safer as less vulnerable to postal strike action and theft.
  • HB can still be withdrawn from various places including the Post Office.
  • avoiding costly charges made by cheque encashment companies who charge between 5 and 10% of the value of a cheque.
  • taking advantage of discounts from companies by setting up direct debits to pay your bills.

If you are being paid HB under the Local Housing Allowance (LHA) rules we will pay HB directly to you. To receive HB in this way you need a bank account. If you do not have a bank account you may be able to get a basic bank account.

Easier access to a basic bank account

If you are claiming HB or Council Tax Support (CTS) we can give you information about these bank accounts and help you to decide which bank you want to bank with.

Merton has been working to make it easier for HB and CTB customers to get a basic bank account. The things we have put in place have been recognised by the Department for Work and Pensions and other Local Government associations as good practice. Details of how we can help HB and CTS customers are shown below -

Basic bank account information


You can download and print the information you need to set up a BBA account. The information is listed below:

  1. HB basic bank account leaflet
  2. Financial Services Authority leaflet. (Alternatively you can get information from the Money Advice Service)
  3. List of local banks with basic bank accounts
  4. HB payments by Direct Credit leaflet and form

If you are unable to print this, you can contact us and we will send it to you instead.

If you currently receive Housing Benefit or Council Tax Support, you need to ask for a Basic Bank Account proof of identity letter from Merton Benefits Service. This will confirm your identity and residency (to give to the bank as part of your application for a BBA if you choose one of three local Lloyds TSB branches). If you want the BBA proof of identity letter please contact us.

Assistance through the application process

We can assist you through the process by helping you to make appointments with banks to set up the account. If you need advice or assistance with the process contact us and we will try to help.

Proof of identity and residency

As part of the application you will normally need to provide 2-3 documents as proof of identity and residency. To help with this we have done two things to make this easier for HB and CTS customers.

  • we have an agreement with Lloyds TSB to provide proof of your identity and residency in support of your application for a Cash Account. This means you only need to provide the letter we will give you as proof of residency and identity instead of the 2-3 pieces of proof you would normally have to provide.
  • we have developed a Confirmation of Identity letter that may be acceptable to other banks when you apply for their basic bank accounts. We cannot guarantee that they will accept the letter and you may still be required to provide further proof of identity and residency.

Please note - Merton has paved the way to make it easier for HB and CTS claimants to apply for basic bank accounts but we cannot guarantee that the banks will agree to open an account for you. They will apply their normal criteria in deciding if you can have an account. For example, some banks will not give basic bank accounts to customers who are undischarged bankrupts.

Banks that have Basic Bank Accounts

There are several banks that have these types of account. The way you open an account can vary widely. With some banks the application is completed at a branch and the account is opened at a processing centre. These accounts can take weeks to be decided.

Other banks ask you to go to a local branch where the account is opened at that time. We would recommend that you apply to a bank that offers the facility to open the account in the branch. This is the quickest method and allows you to get your identity and documents checked in branch. You will also be able to find out your account number and sort code straight away.

Merton has looked at some of the banks in the borough who provide Basic Bank Accounts. Each bank has its own application process. We have put together a list of local banks with Basic Bank Accounts which gives details of:

  • how the application can be made - including contact details to make an appointment in the local branch;
  • how the application for the account is handled and opened.
  • any additional features of the account, for example Visa Electron or Solo cards
  • the address of local branches and where applicable the fax and phone number of the branch.

See also

Contact us

Merton Benefits Service
PO Box 610
Merton Civic Centre
London Road

Telephone: 020 8274 4903
Fax: 020 8545 3960