Banking on helping the homeless

After a long period of being down on your luck you're finally offered a job. However, your elation turns to bitterness when they tell you your wages will be paid directly into your bank - but you don't have a bank account.

You want to save money and put down a deposit on a flat of your own, but you don't have a bank account. Will you carry your growing pile of money about with you at all times and risk being mugged, or will you leave it under the bed in your hostel and risk it being stolen - or will you give up and stop trying to save money?

You could try to open a bank account, but you might be like the millions of people in Britain today who are refused because of bad credit history, a lack of a driving license or passport to prove your identity or, at the extreme end of social exclusion, a lack of an address.

As we increasingly move towards a "cashless" society, those without bank accounts are left on the outside. Despite government pressure, there are still three million "unbanked" people in Britain today. Not surprisingly, homeless people are almost entirely excluded from banking services, yet they are among the most at risk of assault and robbery living as they do on the streets or in dangerous hostels.

The Big Issue recognises the need for homeless people to access banking facilities. Thanks to Bank of Scotland, this is now happening. The amount of red tape and financial regulation involved in setting up a bank account is huge, but the Bank of Scotland has found ways to cut through the red tape and take risks.

Six years ago, the bank agreed to accept Big Issue vendor badges as proof of identity to open a bank account. The bank enabled Big Issue vendors and other homeless people to use its easy cash, no-frills accounts.

But homeless people weren't making full use of the services. As one Big Issue vendor explained, they were embarrassed to go into "posh" bank branches; embarrassed to be depositing small amounts of money - ?1 or ?2 at a time - in such places.

So once again Bank of Scotland and the Big Issue in Scotland put our heads together, this time with the full support of Glasgow city council, which was keen to explore ways of offering financial services to homeless people.

The result was Grand Central Savings - a "branch" of Bank of Scotland for the exclusive use of homeless people, based in the Big Issue in Scotland's Glasgow headquarters. In its first two weeks of operation nearly 60 homeless people have opened bank accounts, and we're confident that this will be 200 by the end of the year. Some are saving for deposits on flats. Some are just saving for Christmas, hoping to avoid the trap of catalogue debt this year. Some just use the bank to keep their takings from selling the Big Issue safe overnight. Just like anyone else, each Grand Central Savings customer has his or her own way of managing money.

At the public launch of Grand Central Savings in Glasgow yesterday, one Big Issue vendor was explaining to Peter Burt, the chief executive of Bank of Scotland, how pleased she was to finally have access to a bank. Peter Burt joked that the next time he saw her he hoped it was when she came to the bank to arrange a mortgage. The vendor laughed, but she didn't rule out the possibility.

• Tricia Hughes is group managing director of the Big Issue in Scotland.