Five major banks to allow homeless people to open bank accounts under new pilot

Thousands of people experiencing homelessness will be able to open bank accounts with five major UK banks as part of the government’s new financial inclusion strategy.

Lucy Rigby, economic secretary to the Treasury, told Big Issue that Lloyds, NatWest, Barclays, Nationwide and Santander will open their doors to people without a fixed address.

The move is part of a pilot programme with Shelter that builds on the housing charity’s partnership with HSBC, which launched in December 2019.

The No Fixed Address service has helped 7,000 people open a bank account with Shelter vouching for people without a fixed address.

Rigby told Big Issue that the expanded pilot will remove a major barrier preventing people experiencing homelessness from opening a bank account and, ultimately, getting paid work.

“Financial inclusion is about participation in our economy but it’s really about participation in our society as well and we know that for far too many vulnerable people there are still barriers to financial inclusion,” said Rigby.

“For those sleeping rough and homeless people, we know that opening a bank account can be nigh-on impossible to get a bank account. Yet without a bank account it is difficult to get a job and certainly getting a home is even harder.

“So that’s why we’re really pleased to announce this new partnership with five major high street banks and with Shelter exactly to make it easier for people without a fixed address to open a bank account.”

An address is typically needed to open a bank account alongside identification and these hurdles can be difficult to overcome when experiencing homelessness.

It’s a challenge Big Issue also works to overcome, helping our vendors open bank accounts so they can take cashless payments on their pitch.

Read more:

• UK risks ‘sleepwalking into crisis’ as cashless society shuts out more and more vulnerable people
• Homeless people were given free cash to buy what they want – here’s what they spent their money on
• People with mental health issues forced to share their PIN – leaving them open to ‘abuse and fraud’

Last year Big Issue Group supported 445 people to be more financially and digitally included and helped 206 new vendors accept cashless payments.

Financial exclusion continues to affect millions of people in the UK. The Financial Conduct Authority’s Our Financial Lives survey found last year that 12.1 million people had issues accessing a financial product or service in the two years to May 2022. 

Shelter’s expanded pilot aims to help thousands of people overcome financial hurdles and Rigby said the measure is an example of how Labour will work across government in its upcoming long-term homelessness strategy.

Lauren Thompson, head of corporate partnerships at Shelter, said: “Our Breaking the Cycle initiative is a vital step in providing essential financial support, housing advice, and resources to help people at risk of or experiencing homelessness.  

“Every day at Shelter, we see the crippling financial pressures often faced by those hit the hardest by the housing emergency. Many are skipping meals just to cover rent, cutting back on essentials, and making impossible choices simply to stay afloat. Access to banking can help people receive financial support, pay bills, and find and keep a safe home. Through our partnership with HSBC UK, pioneers in this space, we’ve supported over 7,000 people experiencing homelessness or housing difficulties to open a bank account. Breaking the Cycle can help support people to regain control, build financial resilience, and rebuild their lives.” 

The new pilot is part of a wider financial inclusion strategy, launching today (5 November), that sets out a national plan to make financial services work for everyone, including vulnerable people who are more likely to be excluded.

Rigby told Big Issue she was “excited” about measures to support victims of domestic abuse and improve financial education in schools.

The strategy includes new work with credit agencies to help victims of domestic abuse repair credit records damaged by economic control – giving survivors a fair chance to rebuild their financial independence.

A greater focus on financial education in schools is aiming to give every primary school child the tools to understand money and make confident financial decisions for the future.  

The strategy will also make it easier for employers to offer payroll savings schemes, helping the one in ten adults with no savings build a financial cushion for unexpected bills.

Labour is also backing the rollout of 350 new banking hubs by the end of this parliament – restoring face-to-face services in towns that have lost their last branch. Ministers are set to open the 200th hub later this year. 

Peter Tutton, director of policy, research and public affairs at debt charity StepChange, said: “Low financial resilience, a lack of savings and limited access to affordable credit, are some of the biggest challenges that keep people trapped in a cycle of debt. We’re pleased to see the government launch its financial inclusion strategy which is a once in a generation opportunity to offer meaningful, long-term financial resilience for people across the UK.

“Our recent research into coerced debt and economic abuse revealed that impaired credit files can be one of the biggest barriers in preventing victim-survivors from rebuilding financial stability. It’s great to see the government take action to address credit scores as part of the strategy.

“We’ve welcomed the opportunity to feed into the strategy and look forward to working closely with the government and others in the sector as it progresses.”

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