When you’re on benefits, you need a bank account that works for you, not against you.
No monthly fees eating into your limited income. No overdraft charges when money’s tight. No credit checks will reject you. And ideally, tools to help you budget.
I’ve compared every basic bank account available to people on benefits in the UK. Here are the best options.
Why Basic Bank Accounts Are Best for Benefits
If you’re on benefits, a basic bank account is usually your best option.
What is a basic bank account?
- No monthly fees
- No minimum balance required
- No overdraft (so no overdraft charges)
- No credit check needed
- Can receive benefits payments
- Comes with a debit card
You can’t go into debt (no overdraft), there are no fees to worry about, and they accept almost everyone.
Best Basic Bank Accounts for People on Benefits UK 2025
1. Monzo Basic Bank Account – Best Overall
Why it’s good:
- Excellent budgeting tools (pots, spending categories)
- Instant notifications for every transaction
- Fee-free cash withdrawals in UK
- Great app
- Can freeze your card instantly if lost
How to apply: Download Monzo app, takes 5 minutes
2. Starling Bank Basic Account – Best Features
Why it’s good:
- Similar to Monzo with excellent app
- “Spaces” for budgeting
- Instant notifications
- No fees
- Great customer service
How to apply: Download Starling app, apply online
3. Barclays Basic Account – Best if You Want Branches
Why it’s good:
- Access to Barclays branches nationwide
- Face-to-face support if needed
- Accepts almost everyone
- Mobile app available
How to apply: In branch or online
4. Lloyds Basic Account – Good High Street Option
Why it’s good:
- Lloyds branches everywhere
- No fees
- Basic but reliable
- Mobile banking app
How to apply: In branch or online
5. NatWest Foundation Account – Decent All-Rounder
Why it’s good:
- NatWest/RBS branch network
- No fees or credit checks
- Can upgrade to regular account later
How to apply: In branch or online
How to Budget on Benefits Using Your Bank Account
Use pots/spaces (Monzo/Starling):
When your benefits arrive, split them immediately:
- Rent pot
- Bills pot
- Food pot
- Emergency pot
This stops you accidentally spending rent money.
Set up Direct Debits:
Pay rent and bills by Direct Debit on the day after your benefits arrive. Money goes out automatically before you can spend it.
Use notifications:
Turn on spending notifications. Every time you spend, you get an alert. Helps you stay aware of where your money goes.
Accounts to Avoid When on Benefits
Packaged accounts with monthly fees: Some banks charge £10-15/month for “premium” accounts. You don’t need these.
Accounts with minimum balance requirements: When on benefits, your balance will regularly be low. Avoid accounts that charge fees for low balances.
Getting a Bank Account if You’ve Been Refused
If you’re refused, try a different bank. Each bank has different criteria.
If multiple banks refuse you, contact the bank’s hardship team. Under the Financial Inclusion agreement, banks should offer basic accounts to almost everyone.
Last resort: Apply for a Post Office Card Account. Not a full bank account but you can receive benefits on it.
How Benefits Are Paid Into Your Account
Benefits are paid directly into your bank account by BACS transfer.
Payment schedule:
- Universal Credit: Monthly (same date each month)
- Child Benefit: Every 4 weeks
- PIP: Every 4 weeks
- ESA: Every 2 weeks
- Carer’s Allowance: Weekly or every 4 weeks
Common Questions
Do I need a bank account to claim benefits? Yes, for Universal Credit and most other benefits.
Can I have two bank accounts? Yes. Some people have one for benefits and one for earnings.
Will opening a bank account affect my benefits? No. Having a bank account doesn’t affect benefit entitlement.
Final Thoughts
The best bank account for benefits is one that has no fees, helps you budget, is easy to use, and accepts you without credit checks.
For most people, that’s Monzo or Starling if you’re comfortable with app-only banking, or Barclays/Lloyds if you want branch access.
Don’t pay monthly fees. Don’t get an overdraft you don’t need. Keep it simple.
Apply here:
- Monzo – Download app
- Starling Bank – Download app
- Barclays – Apply online or in branch
Last updated: October 2025
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- Universal Credit UK: Complete Guide for Beginners 2025
- PIP Application Guide UK 2025: How to Apply for Personal Independence Payment
- Child Benefit UK: Complete Guide 2025
- Universal Credit Sanctions: What to Do If You’re Sanctioned
- Benefits Calculator UK: What Am I Entitled To? (Check in 10 Minutes)
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