A personal injury trust account in the UK is a special type of bank account used to hold compensation received for a personal injury claim, such as damages from an accident, medical negligence, or other injury-related cases. The primary purpose of a personal injury trust is to ensure that the compensation does not affect the injured person’s eligibility for means-tested benefits or care support.

Key Features of a Personal Injury Trust:

1. Exemption from Means-Tested Benefits:

   • Without a trust, compensation could be counted as part of your financial assets. If your total assets exceed a certain threshold (e.g., £6,000 for certain benefits), this might reduce or disqualify you from receiving benefits.
   • Funds held in a personal injury trust are disregarded for means-tested benefits purposes as long as the trust is correctly set up.

2. Protection of Funds:

   • A trust protects the compensation from being spent unintentionally or accessed by creditors, family members, or others.

3. Set-Up Timeframe:

   • It’s recommended to set up the trust within 52 weeks of receiving the compensation. During this period, the compensation is generally disregarded for means-testing purposes, even if a trust isn’t yet in place.

4. Trustees:

   • The trust requires trustees, who are individuals responsible for managing the account. Typically, you (the injured party) can be a trustee, but it’s advisable to appoint at least one or two other trustworthy individuals, such as family members or professionals.

5. Types of Trusts:

   • The most common type used for this purpose is a bare trust (simple trust), where the injured person retains full control over how the funds are used, but the funds are still legally held in trust.

6. Uses of the Funds:

   • The funds can only be used for your benefit, such as medical care, housing adaptations, or general living costs. However, trustees should ensure the spending aligns with the trust’s purposes.

The Personal Injury Trust Account from Money Carer

Professionals such as solicitors, independent financial advisors (IFAs), and family trustees can open a personal injury trust bank account on the Monika banking platform within minutes. The account can then be used to receive deposits and make payments from a bank account to support the beneficiary in line with the trustee’s fiduciary responsibilities.

As Money Carer has a unique and long-established relationship with Zempler Bank, trustees can immediately benefit from the banking services technology and payment innovations developed by Money Carer and used by hundreds of law firms and local authorities to help them fulfil their fiduciary duties in supporting the vulnerable people under their care.

To open a personal injury trust bank account, simply contact us.

In the UK, several high street banks and building societies have recently withdrawn their personal injury trust accounts, citing increased costs, complexity, and compliance challenges. Notably, Nationwide Building Society has closed such accounts, leaving customers to seek alternatives.

This trend has significantly impacted vulnerable individuals, including those with disabilities or learning difficulties, who rely on these accounts to manage compensation funds without affecting their eligibility for means-tested benefits. The closures have led to difficulties in accessing essential funds, causing distress among account holders.

The Monika Banking Platform provided by Money Carer, the UK’s largest provider of appointee money management services for vulnerable people, provides a much-needed solution via its Personal Injury Trust Bank Account that allows professional and family trustees to open an account online and free of charge.

The account can be used to receive deposits and make payments to support trustees and beneficiaries, and can also be linked to separate, everyday spending accounts and issue prepaid debit cards for use by beneficiaries or their carers.

In summary, while a few traditional banks like Metro Bank offer personal injury trust accounts with associated fees and potentially longer setup times, innovations such as the Monika Banking Platform provide a more modern, cost-effective banking service with quick account opening and no setup fees.

Linked Article: Nationwide Building Society Personal Injury Trust Accounts