The high street building society is one of many British banks phasing out its “Trust” accounts, which allow people to appoint a third party to manage their finances for them
Nationwide is closing bank accounts “without warning” leaving some Brits without access to their money.
The high street building society is one of many British banks phasing out its “Trust” accounts, which allow people to appoint a third party to manage their finances for them. According to a report from the Guardian, Nationwide account holders are now being blocked from accessing the cash while the building society prepares to close trust accounts for good.
The accounts have been described as a “lifeline” for those with disabilities and people with learning difficulties as they allow their money to be safely handled by an appointed trustee. The money held in the trust accounts also does not affect someone’s status when it comes to means testing for benefits and is eligible for tax relief. The accounts are also used by victims awarded personal injury settlements – allowing them to keep and administer compensation from a personal injury.
The phase-out of trust accounts has been blamed on the cost of running them, as well as the stringent laws surrounding them. One man, James Trotman, told the Guardian that £28,000 held in his disabled son’s account had been frozen without warning, leaving him cut off from the money. He told the paper that Nationwide had instructed him to re-submit verifying paperwork to access the funds, but a month after doing so, the account remained frozen.
Charities have warned that these blockages and the closure of the accounts, could be “detrimental” for vulnerable people. Mencap’s chief executive, Jon Sparkes, told the Guardian: “Some already have a disabled person’s trust account in place but have been warned it is now due to close, and others can’t set one up because banks no longer offer this type of service. We’re hearing from an increasing number of families of people with a learning disability who don’t know where to turn.”
Another trustee told the paper that she, too, was told to resubmit documents after her disabled brother’s account was frozen. But three weeks later, the funds were still not accessible – meaning she could not replace her brother’s broken laptop.
Metro is the only high-street bank to still offer trust accounts. However, those opening an account will need to pay a one-off £150 opening fee plus £5 a month if the account has less than £25,000 in it. On the issue, a Nationwide spokesperson said: “We are closing some trust accounts and have been writing to trustees outlining their options. Where there is an ongoing need for a trust account, a new account will need to be opened elsewhere.
“We needed information from the customers prior to closing the account and a security block was placed on the account while this took place. This information has been received from the customer and the block has been removed, with the funds released. We apologise for the inconvenience that completing this process has caused.”
