‘It’s a lifeline’ – how bank accounts can disrupt the cycle of homelessness

Kai, a 22-year-old man from Ilford, east London, has been staying at Centrepoint for the past four years. He became a primary carer for his father in his teens, which led to him dropping out of college. When his father died he lost his accommodation rights.

“When I left college I no longer qualified for income support,” he says. “I didn’t understand the benefits system, I didn’t know how to open a bank account and my dad hadn’t been well enough to help me.”

Indigo, a local project run by Barnardo’s in Redbridge, helped him open a bank account, and Redbridge Council support service provided financial advice.

“I needed help – and there is help, but only if you know where to go, and I didn’t at the time,” he says. “The benefit system is an impossible task to keep track of, especially if you’re young. I had to have a bank account to get money paid in.”

Many of the estimated 4,677 people sleeping rough on England’s streets are entitled to universal credit, pensions and disability benefits – but without a bank account they may not receive the money they’re owed, making it that much more difficult for them to survive or rebuild their life.

A similar catch-22 situation can apply when it comes to finding work: without a fixed address it’s almost impossible to open a bank account; and without a bank account, it’s almost impossible to access the kind of work you need to secure a home.

“It’s very hard to get a job without a bank account because of tax and PAYE – you need one to be legitimate,” explains Nick, a 39-year-old former homeless man from High Wycombe. “I was fortunate I still had the bank account my parents had set up for me when I was a teenager, even if it didn’t have much left in it. It meant I could get myself back together eventually.”

Paul Noblet, head of public affairs at Centrepoint, notes that paperwork isn’t necessarily foremost in people’s minds when they become homeless. “Many people leave home quickly, without documents such as birth certificates and passports,” he explains. “They need to claim benefits – and those are paid into bank accounts – so we provide them with an address to set one up.”

The 2016 EU Payment Accounts Directive obliges UK banks to consider applications for a “payment” account by any consumer. This led to the creation of basic bank accounts that enable users to store and transfer money, and provide a debit card, but have no credit or overdraft facilities. National and local organisations working with homeless people can often act as an intermediary in setting one up.

Earlier this year, HSBC UK set out to tackle some of the problems around providing a bank account for people without a fixed address. Homeless customers can verify their identity with a signed letter from the manager of their shelter or refuge. A caseworker from the organisation also attends their appointment to open the account, which provides the owner with a debit card, access to telephone and online banking, and the ability to set up direct debits and standing orders.

The No Fixed Address service evolved from HSBC UK’s service providing bank accounts for victims of human trafficking and modern slavery. When the bank’s Liverpool Lord Street branch began piloting the No Fixed Address service in mid-May, Sheena Evans, who works there, expected to open between nine and 12 accounts in the first few months, but this number has been exceeded. “As we speak, we’ve opened 51 accounts,” she says.

The project, which was initially carried out in partnership with the Whitechapel Centre, a homeless and housing charity for the Liverpool region, has had a huge impact on staff as well as local homeless people, says Evans: “One of the team here came up to me and said: ‘I’ve just opened an account for somebody who’s been homeless for a really long while.’ She was quite choked up, and she told me that as the gentleman left, he’d said: ‘This is the first time I’ve been made to feel like a human being in such a long time.’”

The accounts have also helped victims of domestic abuse who stay in women’s refuges. According to recently released government figures [pdf], 6,020 households became homeless due to domestic abuse between January and March 2019. Many women fleeing from an abusive environment don’t have the opportunity to collect their personal items – including their ID. The perpetrator of the abuse may also try to destroy their personal documents in order to maintain their control over them.

“Sometimes, people come to us with just the clothes on their back – and that’s not an exaggeration,” says Jabeen Ferhut, refuge manager at Birmingham and Solihull Women’s Aid (BSWA), which offers safe emergency accommodation at its six refuges. “If you’ve never experienced these issues, it might not seem like a big thing to open a bank account,” says Ferhut. “But, in fact, it’s really fundamental for some of the women we support.”

Although banks occasionally accept the address of a homeless shelter when someone without a fixed address wishes to open an account, this is not an option for BSWA; sharing the address of any of its refuges could put women’s safety at risk. “We don’t want to give our refuge address out to any bank because then it will be on a main system, so anyone can access it,” she explains.

Related: Why homeless people without ID are especially vulnerable to financial abuse

Ferhut says some bank managers used to allow women using BSWA services to use its main charitable address instead, but a change in staff or a call from the bank’s head office could swiftly put an end to that. “We’d go to two or three appointments, and in the end a manager up the line somewhere would ring up and say no. That was really quite humiliating for the women.”

Staff at HSBC UK’s Birmingham New Street branch have been showing women who’ve been affected by domestic violence and controlling behaviour how to access their new account online – something Ferhut says has empowered them. “It’s a victory for that woman when she goes into the bank and is treated as an equal,” she says. “She’s not invisible any more and her voice is being heard … it’s made women cry when they’ve opened an account after being told [by the perpetrator of their abuse] that the bank wouldn’t help them.” In fact, Ferhut describes the No Fixed Address scheme as more than just a bank account for these women. “It’s a lifeline,” she says.

HSBC UK is working with local housing and homelessness charities to provide bank accounts to people without a fixed address, helping to break the cycle of financial exclusion. To find out more about this, and what else HSBC UK is doing to support local communities, visit hsbc.co.uk/togetherwethrive