Why Does Deposit Protection Matter So Much?
As a UK landlord, you must protect any tenancy deposit for an assured shorthold tenancy (AST) in one of three government-approved schemes within 30 days of receiving it.
The consequences of failing to do so are severe:
You must also serve Prescribed Information within the same 30-day window. This is a formal document telling the tenant which scheme protects their deposit, how to access it and how the dispute resolution process works.
The Three Government-Approved Schemes
There are three schemes, and they work in two fundamentally different ways:
Custodial schemes (free): You transfer the deposit to the scheme, which holds it throughout the tenancy and returns it once both parties agree.
Insured schemes (you pay a fee): You keep the deposit yourself, but it's "insured" by the scheme. You pay a fee per deposit. The scheme only becomes involved in a dispute.
Scheme Comparison
Deposit Protection Service (DPS) — depositprotection.com
Tenancy Deposit Scheme (TDS) — tenancydepositscheme.com
mydeposits — mydeposits.co.uk
Custodial vs Insured: Which Should You Choose?
Choose custodial if:
Choose insured if:
For the vast majority of independent landlords, custodial is the better choice. It's free, legally watertight and requires less administration.
What Happens If You Miss the 30-Day Deadline?
Once you miss the 30-day window, you cannot "fix" it simply by protecting the deposit late. You'll still be in breach for the original failure, and a court can award the tenant damages even if the deposit is subsequently protected.
The only way to resolve this cleanly is to:
1. Return the full deposit immediately
2. (If the tenant agrees) protect it afresh in a new scheme with correct Prescribed Information
3. Consider whether you need to negotiate with the tenant regarding the breach
This is why LetCompliance sends reminders as soon as a new deposit is recorded — you get alerts before the 30-day window closes.