1. The
right of appropriation
applies to any money paid into a bank account, so it isn't just for benefit payments and can apply to wages, pensions etc as well.
2. As far as I am aware there is no argument the banks can use about what
proportion of income can be protected in this way, and it shouldn't matter
what the money is being earmarked for. The basic legal principal is that it
is your money and if you state a preferred use for it before it is paid to
the bank, then they can do nothing about it. The important point is that it
must be in writing and must be done before the money is paid in.
Most of our clients are on low incomes and can easily account for all the
money going in. We usually suggest that where banks ignore the letter
clients should threaten a complaint to the Financial
Ombudsman Service
(basically because it is free, so is preferable to court action to recover
money) - at this stage, most banks refund the money, but the ombudsman will
look at what is reasonable, so there might be more of an issue if someone
is earmarking money for something which isn't essential. The big problem
with all of this is that it often gets resolved a few weeks later, so the
real problem of having no money at the time hasn't been helped by the time
the refund is made.
3. The text of the letter I use for clients is pasted below - feel free to
use this. Obviously the list of items would be changed in each case. If you
are going to encourage people to use this, it is usually best to warn them
that bank staff may well have no idea what the letter is about, so it can
be awkward for people who are going into branches at the last minute and
may be told that they are in the wrong and the bank will take their money
anyway etc.
Text of letter:
"I am writing to inform you that I am due to have £x paid into my account
on xx/xx/xx, and I wish to use my first
right of appropriation to earmark
this money for the following purpose:
Rent £xx
Utilities bills £xx
Housekeeping money £xx
I will withdraw the money on the day that it is deposited for the above
use, and I would be grateful if you would ensure that any other payments
out of my account do not interfere with this withdrawal."
A&L are bleeding me dry
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Re: A&L are bleeding me dry
Just got back from the bank that hold my dormant account, and was presented with a cashier that "had never done this before". Instilled me with great confidence. He then took my proof of ID etc...and photo copied it and said it had to go to head office to be authorised, so apparently I cant just start using my old accout yet, they treat it as a new account argh! 
