Are you in need of a new basic bank account in the UK?
- Is it because you are entering a debt management plan that you need to move banks?
- Have you got too many bank charges adding up in your existing bank account?
- Do you think your social benefits should be protected from these bank charges?
Here at Lewis Alexander Financial Management, we get many calls from people struggling with bank charges and wondering if they can reclaim the charges that are accruing daily, weekly or monthly.
We also get many calls from clients entering debt management plans with other debt solution providers. These people have been advised to move to a new bank and are usually doing so because of them starting or entering a debt management plan in the UK or simply because they have too many payday loans.
When moving bank, people usually ask which one they should choose, our answer is simple;
“They are all as bad as each other! It is usually, only the artwork above the door that helps you tell them apart!”
This is obviously a lighthearted approach to answering such a question but when moving banks, people usually have a negative balance at the bank they are leaving and this can be due to charges that have accrued whilst the individual has been suffering a change in personal circumstance.
When entering a debt management plan, you may be advised to move bank accounts and open a new account with a bank you have no lending with. This then creates what our debt consolidation industry calls a “safe haven” (meaning a place of refuge or security) for your next salary or monies received. The “safe haven” being the new clear bank account is where all your money would now be paid into, creating a managed situation for you to manage your funds in their entirety as opposed to other credit companies / creditors taking what they wish to from your available funds.
By moving bank account when entering a debt management plan, you are ring fencing your next money / monies received and taking back the control of ALL of your funds that you may have recently lost or been losing.
The old bank account with the negative balance then becomes classed as another unsecured debt that can simply be added to any compliant UK debt management plan.
- Many people ask us if they can enforce Section 187 of the Social Security Administration Act 1992, when considering their consumer rights and dealing with bank charges that are deducted from state benefits paid into a personal bank account in the UK.
There is a very clear explanation of this by Mr Tom Brennan, a Barrister that has taken the time and bother to publish via Consumer Wiki, the information basically comes about from people thinking that Section 187 protects their benefits when they are paid into a personal bank account with a negative balance. They believe or are led to believe that these benefits are not allowed to be taken by their respective bank against charges they may be owing or that remain outstanding, especially when the account is already overdrawn.
- You can read the full article by clicking this link!
- THIS IS NOT CORRECT! They do not mean Bank Charges, they mean Interim Charging Orders placed against properties and their owners or an Attachment to Earnings imposed order by a court or court hearing.
The following is the article by Mr Tom Brennan that is published on Consumer Wiki.
A Barrister’s view:
I researched this topic some time ago, and my understanding of the application of this section is as follows:
Any assignment of your state benefits or pension is void and unenforceable. That is to say, no person or organisation can collect your state benefits/pension in your place as settlement of a debt (subject to certain exceptions involving state institutions). As a result, you could not instruct the DWP to pay your benefits to a 3rd party, and a 3rd party could not enforce any agreement that gives your state benefits to them. This was introduced at the end of the 1800s to stop the first state benefits (such as war pensions) being taken by unscrupulous 3rd parties, which happened an awful lot.
However, under current banking law, once your benefits (or indeed, any other income) is paid into your account, it is no longer classified as your benefits; it becomes part of a generic monetary debt owed to you (if your account is in credit) or owed by you (if your account is in debit). Think of your benefits as a glass of water, and your bank account as a water tank. S.187 effectively strikes down any agreement that stops your weekly glass of water going into your water tank and/or going to somebody else’s water tank. That water is for you and you alone. However, once you have put it into your water tank, it is just becomes part of the whole collection of water that is in there, and can no longer be protected. The practical reason is that you couldn’t identify which of those water molecules (your pennies) that came from your glass (benefits), and which were in there already.
The only way to protect your benefits is to have them paid into a separate account with a separate bank, which avoids any set-off (think of this as the bank linking up any water tanks that you have with them to get the overall amount of water you have stored with them or borrowed from them). A number of banks work with fast transfer payments, so you should be able to move your money from your benefits account with one bank to another account with another bank (such as your house or bills account) within two hours. This is the best way to protect your benefits from everyone and anything.
Tom Brennan, Barrister
- The above is published by www.consumerwiki.co.uk
For further help and advice on how best to deal with personal debt problems, please contact our debt helpline using;
- 0800 018 6868
- Lines are open 24 hours / 7 days
- Calls from a UK land line are usually FREE
- Calls from mobiles may be less expensive if you dial 0161 872 3383
