Current Accounts For The Unemployed

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Tips if you have been made recently unemployed

Losing your job is never a nice experience.

It will be massively overwhelming and quite frankly, a scary time. You will be worrying not only about your future career and job prospects but also the impact on your finances on paying your monthly bills in the near future.

This will be a stressful time but there are positive actions you can take to ensure you are in the best possible shape when it comes to your money situation.

As a first step you will need to cut your spending, right now:

Cancel your monthly/annual subscriptions

While tough at first, get rid of your subscription based services or at least get rid of the ones you don’t use.

Do you have more than 1 TV or movie streaming subscription service e.g. Netflix, Amazon, Apple or Disney?

Cut one of them or even better get rid of them all. What about your music subscriptions e.g. spotify or Amazon – music is important but could you go without it for a short period of time?

One type of subscription that you should definitely get rid of straight away are the ‘beauty boxes’ e.g. Beatypie or Elle or ‘food boxes’ e.g. Hello Fresh or Gousto! You know, the type you sign up to once and they send you goodies straight to your door every month/week for a monthly fee via a DDM.

In the short term these are bills you can afford to cut, and you can always re-start them again once you are in paid employment.

Call your utility providers

Next action , you need to get on the phone to all your service providers (think TV, gas and electricity companies, mobile phone and broadband providers, credit card companies, bank loan companies). They need to know about your situation – They may be able to help stop your monthly bills from getting out of control. Some providers will be happy to put you on a lower tariff structure  while you look for a new job.

Make space for the ‘little luxuries’

Having to reign back on spending is never fun, but it is particularly hard if you are not sure what the future will bring and when you will have disposable income to treat yourself now and then. Making the move to cut down on your outgoings is important not only because you will need the money to provide for essentials, but to reduce the potential for getting into debt.

While this can be a difficult time cutting out any fun completely in your life is not good for the soul!

It is a good idea to budget some cash so you can have some breathing space to let your hair down or to keep your spirits up while you looking for work.


Current Accounts for the Unemployed

If you are unemployed and you want to open a current account you may find that you are limited as to the type of account you are legally allowed to open. To open some types of current account you are required to provide a regular income – usually on a monthly basis at a minimum specified level. It is unlikely that you will be able to open a current account with bonus features, such as:

  • Rewards
  • Interest-free overdrafts
  • High interest rates

You will be able to open a standard current account and receive a debit card, with telephone and online banking services. You will also be able to set up direct debits and standing orders if you need to. If you wish to use your debit card while abroad you should specifically ask for a VISA type card, rather than SOLO, Maestro or Cirrus.

Even though your options may be more limited, comparing different current account deals is still the best way to make sure your needs are adequately catered for.

Jobseekers’ Allowance

If you are claiming or have applied for jobseekers’ allowance you will need to open a current account to receive your benefits. You must, however, prove to the job centre that you are looking for employment; else you may lose your entitlement to jobseekers’ allowance.

Opening a current account may well be the first step you make towards finding employment. It is important to recognise the importance in having a current account because your prospective employer may require your bank details to pay you.

Compare Current Accounts

You should always compare a range of current accounts from a variety of banks and building societies before you open any current account. It is wise to be sure of your choice prior to agreeing to a bank or building society’s terms and conditions. If you do change your mind, it is easy to switch but this process can take up to ten days.

You should use our comparison tables to find a banking organisation that offers you the type of account that meets your personal needs.

Your new bank is responsible for contacting you before the switch date if there are any hitches with transferring your standing orders and direct debits – and incoming payments.

And the switching service is covered by a guarantee: the new bank must refund you if there are any charges because payments didn’t go through on time.  But you have to ask them for this.

Yes – you can use the partial switch service and keep your old account open, transferring all or some of your payments. But the process isn’t covered by the service guarantee so it can take longer: possibly up to 20 working days. And there isn’t an automatic-redirect for the three years after you switch. A partial switch may not qualify for the incentives offered for switching (though that shouldn’t be the only reason why you change accounts).

Not all your regular bill payments may be made by direct debits or standing orders. Some service providers (such as telecoms services, online subscriptions, gym membership and payday loans) get you to set up a “recurring payment” or “continuous payment authority” which is linked to your debit or credit card

Because they’re linked to a card rather than directly to your bank account, they’re not included in the switching service (or covered by the guarantee).

It’s not always clear which are your continuous payment authorities: you won’t find them listed on your online banking portal. When you set them up you were asked for you card details (“please read me the long card number”) rather than your bank account and sort code numbers.

You’ll need to check your monthly card statements: any regular payments going out each month that are not marked as DD (direct debit) or SO (standing order) are likely to be continuous payment authorities.

If you want to keep paying for this service (or loan) in this way, you’ll need to contact each provider and tell them your new card details as soon as you have them.

This may sound like a lot of bother, but it is useful to check periodically what’s going out of your account regularly: there may be services you’re not using (such as fast delivery, or additional online data storage) that you want to cancel.

If you can remember the family members or friends who occasionally transfer money directly to your bank, you can send them your new account details and ask them to set them you up as a new Payee.

It’s probably not a good idea to just email all your Contacts with your new account details. If you’re concerned about email security, the most secure way of sending bank account details to specific people is via WhatsApp.

And if any payments are accidentally made to your old account, for 36 months (three years) after you’ve switched, your new bank or building society will arrange for any payments to be automatically redirected to your new account. They will also contact the sender and give them your new account details.

You can pick any convenient day in the month, so long as it’s more than a week away, and not a weekend or a bank holiday.

If all your regular payments tend to go out of your account around the same time it’s best to choose a time of the month when your bank account isn’t so busy.