An article in the Observer today ‘Banks exploiting obscure law to raid accounts and recover debts‘ prompts me to remind readers on housing benefit (HB), or landlords of tenants on housing benefits, of the advantages of using Credit Unions.
If you find it difficult to keep your bank account under control, you are always at risk that your housing benefit is going to be used up and will not be available to pay out to your landlord, thus putting your home at risk. Under the new rules which came into force last year, the new housing benefit, Local Housing Allowance (LHA), has to be paid (save in a few circumstances) to the tenant. Whereas before tenants could ask that it be paid direct to landlords, to safeguard their home.
Quite a few credit unions offer a service whereby they will ringfence any HB/LHA paid in, so it gets paid out to the landlord and cannot be used for any other purpose. I am compiling a list of credit unions offering this service on my Landlord Law site which you can see here. If you know of, or work for, any other credit unions offering this service, please let me know and I will add them to the list.
Credit unions would also be a safe haven for money being saved up for other purposes, to keep it safe from regular banks offsetting it against debts, as described in the Observer article.