Do You Get Interest on Your Tenancy Deposit in England?

If you’re renting a home in England, you likely paid a deposit at the start of your tenancy. Many renters wonder: am I entitled to interest on my deposit? Knowing your rights helps you make informed decisions and avoid misunderstandings with your landlord.

Are Renters Entitled to Interest on Deposits?

Since April 2007, landlords in England must protect most tenancy deposits in a government-approved tenancy deposit protection (TDP) scheme. These schemes safeguard your money and provide dispute resolution services—but what about interest?

• No automatic right to interest: Current law does not require landlords or TDP schemes to pay interest to renters on their deposit during the tenancy.
• Interest earned may not be passed to tenants: Some TDP schemes do invest deposits and earn interest, but most keep these earnings to cover administrative costs and dispute resolution services.
• Some older tenancies (before April 2007) or specific contract terms may include an interest clause.

Tenancy deposits in England are regulated under the Housing Act 2004, Part 6, Chapter 4^[1] and related regulations.

When Could You Receive Interest?

Most standard assured shorthold tenancies starting after April 2007 will not include interest in deposit returns. However, you could be paid interest if:

• Your tenancy agreement specifically states the landlord will pay interest on the deposit.
• Your deposit was taken before 6 April 2007 and is governed by an older tenancy contract including an interest clause.
• The landlord delayed returning your deposit after the end of tenancy; in some cases, a court might order compensation, which is not described as interest but could be for loss of use of your money.

Deposit Protection Schemes and Interest

England has three government-approved TDP schemes. Each scheme publishes its own rules about interest:

• Deposit Protection Service (DPS)
• mydeposits
• Tenancy Deposit Scheme (TDS)

In all these schemes, any interest earned on deposits typically belongs to the scheme to fund running costs or dispute services. Schemes are not required to pay this interest to either party.

Key Takeaway

What If There’s a Dispute About Your Deposit?

If your landlord fails to return your deposit on time, or you disagree with deductions, you have options:

• Contact your TDP scheme to use its free dispute resolution service.
• If necessary, apply to the county court for the return of your deposit.

Official Forms and How to Use Them

• Form N208 – Claim Form
  If your tenancy has ended and your landlord hasn't returned your deposit (or failed to protect it), you may need to use Form N208: Claim Form (Part 8) to start court proceedings. For example, if you were not able to resolve a dispute via the TDP scheme or your landlord did not protect your deposit, complete this form and submit it to your local county court. Read guidance on using this form at Tenancy deposit disputes and problems.

Which Tribunal or Court Handles Deposit Disputes?

Deposit protection disputes are handled by:

• Your TDP scheme’s Alternative Dispute Resolution (ADR) service (free, evidence-based, online—see your scheme’s website).
• If not resolved, England’s county courts may be used for legal claims (e.g., for the return of the deposit or for compensation).

There is no dedicated tribunal for tenancy disputes in England, but the county court is the venue for most unresolved deposit matters.

FAQ

1. Can my landlord keep interest earned on my deposit?
   Yes—under current law, landlords or the deposit schemes are not required to pay interest on tenancy deposits unless your contract specifically says otherwise.
2. What happens if my landlord hasn't protected my deposit?
   You can apply to your local county court using Form N208 to claim compensation. Courts may order the landlord to pay up to three times the deposit amount as a penalty.
3. How do I check if my deposit is protected?
   Use the official government service on Check your tenancy deposit protection to see if your deposit is registered.
4. What should I do if my landlord makes unfair deductions from my deposit?
   Raise a dispute with your TDP scheme for free adjudication. The scheme will decide how much (if any) your landlord can keep.
5. Where can I get advice about tenancy deposit problems?
   See the next section for official support and advice links for renters.

Need Help? Resources for Renters

• GOV.UK: Tenancy Deposit Protection – Understand your deposit rights and dispute process
• Shelter England: Tenancy Deposit Protection – Step-by-step guidance and helplines
• Citizens Advice: Getting your deposit back
• Find a Court or Tribunal – Locate your nearest court for unresolved disputes
• For independent advice, contact your local council’s housing department

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1. Housing Act 2004, Part 6, Chapter 4 – Tenancy deposit schemes
2. GOV.UK: Tenancy Deposit Protection
3. Form N208: Claim Form – Civil Procedure Rules Part 8

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