Opening a basic bank account and understanding the role of prepaid cards

Life without a bank account can be difficult, if not impossible. A bank account can offer so much more than just a place to store our money. From paying direct debits or utility bills, or receiving a salary or benefits, to simply identifying you as someone who exists, bank accounts are a huge part of a person’s life.

Research suggests that between one third and one half of people in prison don’t have a bank account. Opening an account either whilst in prison or upon release can be difficult, especially if you don’t have the correct ID.

However, as a result of a 9-year project run by Unlock which came to an end in 2014, the situation has improved and the majority of people in prison (or just released) will be able to open a basic bank account with a range of high-street banks.

Although this is important, it remains the case that there are a small number of people that won’t be able to open a basic bank account, perhaps due to a fraud conviction that flags up on the CIFAS database. In this situation, there are other options available.

One of those alternative options is a prepaid card. And we’ve been getting quite a few enquiries to our helpline in recent months about prepaid cards, so we thought we’d cover this in this post.

We were recently made aware of Renovare, an organisation offering to “provide you with a bespoke bank account, debit card and full banking solution to fit your needs” as well as set up mobile phone contracts, find work and access counselling for a monthly membership fee of £7.99. We understand the ‘bank account’ to be a prepaid card like the ones described above.

We have always been cautious in making sure that people try to open a basic bank account, either in prison or when they are released, before looking at alternatives such as prepaid cards.

More information

• For practical information – We have further information on the alternatives to traditional bank accounts and prepaid cards together with general banking information.
• To discuss this issue with others – Read and share your experiences on our online forum
• Questions – If you have any questions about this, you can contact our helpline.