Can I Get a Bank Account During an IVA?

The Short Answer: Yes

You can open and maintain a bank account while subject to an IVA. Unlike bankruptcy — which can restrict your banking — an IVA does not automatically prevent you from having a bank account. However, some circumstances can make it more complicated.

If Your Current Bank is a Creditor

If you owe money to your current bank (e.g., an overdraft or personal loan with them), and that debt is being included in your IVA, the bank may close or restrict your account once the IVA begins. This is known as the right of "set-off" — the bank using money in your account to offset debts you owe them.

To avoid disruption to your finances, it is strongly advisable to open a new bank account with a different institution before your IVA starts. Inform your IP about this so they can ensure your IVA payments go to the correct account.

Basic Bank Accounts

If mainstream banks decline your application due to your credit score, you are entitled to a basic bank account. All major UK banks are required to offer basic accounts to anyone who is legally resident in the UK, regardless of credit history. Basic accounts typically offer:

• A debit card for purchases and cash withdrawals
• Direct debit and standing order facilities
• No overdraft facility

Examples include Barclays Basic Account, Lloyds Basic Account, and NatWest Foundation Account.

Credit Unions

Credit unions are member-owned financial cooperatives that often provide basic current accounts and savings products to people with poor credit histories. They can be a good option if mainstream banks are unwilling to offer you an account.