Do I have to have a bank account?

TIP: If you have a bank account but it is overdrawn, and you are due a Universal Credit payment, contact your bank and state that you wish to exercise your ‘first right of appropriation’. This is where the bank has to allow you to use your Universal Credit to pay for essential goods and services rather than to clear any unauthorised overdraft.

I’ve been told I have to have a bank account for my Universal Credit payments – is this true?

You do not have to have a bank account to claim Universal Credit – but it makes it easier.

If you already have a Post Office Card Account, then you can have your Universal Credit paid into that account BUT Post Office card accounts are closing in November 2022. If you are getting benefits paid into a Post Office Card Account, you should consider opening a bank account.

If you are unable to open a bank account and don’t have a Post Office Card Account, then you may be able to use the Payment Exception Service – see below.

Linette is making a claim for Universal Credit. She already has a bank account so will have her Universal Credit payments paid into that account.

Paul is making a claim for Universal Credit. He doesn’t have a bank account. He’s been having his Income-Related Employment and Support Allowance paid into a Post Office Card Account and his Housing Benefit gets paid directly to his landlord. His son, age 8, is moving back to live with him – he can’t make a new claim for Child Tax Credit – so will have to claim Universal Credit instead. As Paul already has a Post Office card account he can have his Universal Credit paid into that. He will see a large jump in how much he gets paid, as not only will it now be a monthly amount (rather than fortnightly), it will include extra to help him support his son and will include the help he needs to pay his rent. So he will need to make sure he now pays the rent himself.
But he should look into opening a bank or credit union account before November 2022 and report the details on his UC account.

Opening a Bank Account

It’s best to get some advice on which bank account is best for you. Have a look at the Money Advice Service website to see what sort of account suits you best, or talk to an adviser about this.

If you are claiming as a couple, consider setting up a joint account because a joint claim for Universal Credit can normally only be paid into one account and you may both need access to the Universal Credit payment.

If having the Universal Credit payment into one account is inappropriate, talk to your work coach about splitting the payments.
See Alternative Payment Arrangements for more information.

Payment Exception Service

If you can’t use a bank account, credit union account or Post Office Card Account, ask your Work Coach or ring the UC Helpline to see if they will allow you to be paid through the ‘Payment Exception Service’.

You will either be sent a card, a voucher by email, or a text message with a unique reference number. You can use this to withdraw up to £100 at a time from any PayPoint outlet that offers the Payment Exception Service.

You will need to show proof of ID (not a copy) such as:

  • Valid UK photo or paper driving licence, or
  • Current passport, or
  • Current gas, electricity, water or landline phone bill (less than 3 months old), or
  • Council Tax bill, or
  • Tenancy agreement.

If you want someone to collect your money for you, they need:

  • Your payment card or voucher
  • Your proof of identity
  • Their proof of identity.