Six major banks are making it easier to open a bank account. Here is why that matters if you are struggling with money

Six of the UK's biggest banks have just signed up to a programme designed to help people who have been locked out of the banking system.

Barclays, HSBC UK, Lloyds, Nationwide, NatWest and Santander are working with housing charity Shelter and UK Finance to help people open bank accounts even if they cannot provide standard ID or proof of address.

The programme builds on work originally started by Shelter and HSBC, which has already helped more than 7,000 people experiencing homelessness or housing instability to open a bank account. It is now being expanded across the sector as part of the government's Financial Inclusion Strategy.

It might sound like a small thing. But for people at the sharp end of financial difficulty, access to a bank account can change everything.

Why a bank account matters so much

Most employers will only pay wages into a bank account. Most landlords expect rent to be paid by bank transfer or direct debit. Benefits are paid into bank accounts.

Without one, accessing money you are entitled to, paying bills and keeping a roof over your head becomes significantly harder.

Sarah Elliott, Chief Executive at Shelter, put it simply. "Without a bank account, receiving benefits or wages, paying bills or rent, and finding and keeping a safe home can be almost impossible."

David Postings, Chief Executive of UK Finance, added: "Being able to prove who you are should never be a barrier to rebuilding your life."

What is a basic bank account?

A basic bank account is a simple account designed for people who cannot access a standard current account, often because of a poor credit history or previous financial difficulties.

Basic bank accounts do not come with an overdraft. That is actually an important feature. It means you cannot accidentally go into debt with the bank just by using the account.

With a basic bank account you can have wages or benefits paid in, set up direct debits to pay bills, use a debit card for everyday spending and withdraw cash.

You cannot get an overdraft, a cheque book or access to credit. For anyone trying to get on top of their finances, that simplicity can be a genuinely good thing.

Why you might be asked to get one if you are in debt

If you are going through a debt solution such as a debt management plan, an Individual Voluntary Arrangement or a Debt Relief Order, your debt adviser may suggest opening a basic bank account.

Here is why.

If your current bank account is with a lender you also owe money to, they may have the right to take money from your account to cover what you owe. This is sometimes called the right of offset. It can happen without warning and can leave you without money for food or essential bills.

Opening a basic bank account with a different bank, one you do not owe anything to, means your money is protected.

Why people get turned down

Until now, one of the biggest barriers has been proving who you are.

Most banks ask for photo ID and proof of address to open any account. For people experiencing homelessness, fleeing domestic abuse or moving between temporary accommodation, those documents can be impossible to produce.

No fixed address meant no bank account. No bank account meant no wages. No wages meant no home. It is a cycle that is genuinely difficult to break.

The expansion of this programme is designed to tackle exactly that barrier.

What to do if you have been turned down before

If you have been refused a bank account in the past because you could not provide the right ID or did not have a fixed address, it is worth trying again.

The banks involved are Barclays, HSBC UK, Lloyds, Nationwide, NatWest and Santander.