Which deposit protection scheme should I use?

There are three UK government-authorised schemes: the Deposit Protection Service (DPS, custodial and free), MyDeposits (insured, fee-based), and the Tenancy Deposit Scheme (TDS, both custodial and insured). The choice for British landlords in England and Wales depends on whether you want to hold the deposit yourself (insured scheme) or have it held by the scheme (custodial).

What is the difference between custodial and insured schemes?

In a custodial UK scheme, the deposit is held by the scheme itself and is free to use. In an insured scheme, the British landlord holds the deposit but pays a fee for insurance that protects the tenant if the landlord fails to return it in England and Wales. Both types satisfy the legal requirements under English law.

What happens if I protect the deposit late?

Protecting the UK deposit after the 30-day deadline still exposes the British landlord to potential penalties. The tenant can apply to court in England and Wales at any time during the tenancy (or up to six months after it ends) for a penalty order under English law. However, protecting it late is better than not protecting it at all.

Do I need to re-protect the deposit when the tenancy renews?

If the UK tenancy rolls into a statutory periodic tenancy on the same terms, the deposit generally remains protected and does not need to be re-protected in England and Wales. However, if a new British fixed-term agreement is signed, check with your scheme whether the protection needs to be updated.

Can the tenant refuse to sign the acknowledgement?

The UK tenant is not legally required to sign an acknowledgement. However, it is good practice to request one as it provides evidence that the British prescribed information was served in England and Wales. If the tenant refuses, keep other evidence of service such as a certificate of posting.

Does this apply to lodger deposits?

No. UK tenancy deposit protection requirements only apply to assured shorthold tenancies in England and Wales. Deposits taken from British lodgers (who live with a resident UK landlord) do not need to be protected in a scheme.

What if the deposit was paid by a third party?

If the UK deposit was paid by someone other than the tenant (such as a parent or guarantor), the British prescribed information must be served on both the tenant and the person who paid the deposit (the relevant person) in England and Wales.

Can I use the deposit to cover unpaid rent during the tenancy?

The UK deposit should not be used as a rent substitute during the tenancy. It is held as security against damage, unpaid rent, and other obligations at the end of the tenancy in England and Wales. Using it during the British tenancy would leave the landlord without security.

Rental & PropertyUnited Kingdom

Free Tenancy Deposit Protection Letter Template

A professionally drafted deposit protection letter for landlords in England and Wales. Notify your tenant that their deposit has been protected and provide the required prescribed information.

Create Your Tenancy Deposit — Prescribed Information

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David and Helen Carter

14 Rosemary Lane, Guildford, Surrey GU1 4QR

07700 900123

d.carter@example.co.uk

2026-05-05

Emily Richards

Flat 3, 28 Cavendish Road, London SW12 0BL

Re: Prescribed Information — Tenancy Deposit Protection

Deposit: GBP 1,384.62

Dear Emily Richards,

I write to confirm that the security deposit paid in connection with your tenancy of Flat 3, 28 Cavendish Road, London SW12 0BL (the "Property") has been protected in an authorised tenancy deposit scheme in accordance with section 213 of the Housing Act 2004. This letter constitutes the prescribed information required to be served on all tenants and relevant persons under the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (SI 2007/797).

DEPOSIT PROTECTION CONFIRMATION

Your deposit has been paid into an authorised scheme within 30 days of receipt as required by section 213(3) of the Housing Act 2004, and this prescribed information is provided within the 30-day period in section 213(6)(a). Failure to protect the deposit or to serve this information within the 30-day period is a breach of section 213 of the Housing Act 2004 giving rise to: (a) the landlord's inability to serve a valid section 21 notice under section 21A of the Housing Act 1988 until the breach is remedied; and (b) the tenant's right to apply to the County Court for an order under section 214 of the Housing Act 2004 for the return of the deposit and a sanction of between one and three times the amount of the deposit.

TENANCY AND LANDLORD DETAILS

Property: Flat 3, 28 Cavendish Road, London SW12 0BL
Tenancy type: Assured Shorthold Tenancy (Fixed Term)
Tenancy start date: 2026-05-01
Monthly rent: GBP 1,200.00
Tenancy reference: TEN-2026-0042
Landlord: David and Helen Carter, 14 Rosemary Lane, Guildford, Surrey GU1 4QR
Landlord email: d.carter@example.co.uk
Landlord phone: 07700 900123

DEPOSIT PROTECTION DETAILS

Amount protected: GBP 1,384.62
Date paid: 2026-05-05
Scheme: Deposit Protection Service (DPS)
Scheme address: The Pavilions, Bridgwater Road, Bristol BS13 8AE
Scheme telephone: 0330 303 0030
Scheme website: www.depositprotection.com
Scheme reference number: DPS-2026-004512
Date of protection: 2026-05-05
Scheme type: Custodial (the scheme holds the money for the duration of the tenancy)
Statutory cap applied: a maximum of five weeks' rent under paragraph 2(1) of Schedule 1 to the Tenant Fees Act 2019 (annual rent under £50,000)

WHAT THE DEPOSIT COVERS

The deposit is held as security for the performance of the tenant's obligations under the tenancy. At the end of the tenancy deductions may be made (in each case on evidence and in writing) for: (a) unpaid rent or other sums due under the tenancy; (b) damage to the Property, its fixtures, fittings, furnishings or contents beyond fair wear and tear (applying the common-law principle in Regis Property Co v Dudley [1959] AC 370); (c) cleaning costs where the Property is not returned in substantially the same condition as recorded in the inventory and schedule of condition; (d) any other loss to the landlord arising from a breach of the tenancy that is not excluded by law. Deductions may not include any amount that is a "prohibited payment" under section 1 of the Tenant Fees Act 2019.

RETURN OF DEPOSIT AND DISPUTE RESOLUTION

At the end of the tenancy the parties will attempt to agree any deductions. The undisputed amount will be released to the tenant within 10 working days of that agreement in accordance with the scheme's rules. If there is a dispute the free alternative dispute resolution (ADR) service provided by the Deposit Protection Service (DPS) may be used. The scheme's decision is binding on both parties where they agree to use the ADR service. Full details of the ADR procedure are available from the scheme's website and in its leaflet "What is the tenancy deposit scheme?" / Scheme Guide, a copy of which is provided with this letter.

TENANT'S STATUTORY RIGHTS

You have the right to: (a) the return of your deposit, less any agreed or adjudicated deductions, at the end of the tenancy; (b) free dispute resolution through the scheme's ADR service; (c) apply to the County Court under section 214 of the Housing Act 2004 if this prescribed information is inaccurate or has been served late, or if the deposit has not been protected; (d) prevent the service of a valid section 21 notice where the landlord has not complied with deposit-protection requirements (section 21A Housing Act 1988); and (e) require any sum that is a "prohibited payment" under the Tenant Fees Act 2019 to be repaid.

CONFIRMATION OF SERVICE

This prescribed information is served on each of the following tenants and any relevant person who paid the deposit on their behalf, in accordance with articles 2 and 3 of the Housing (Tenancy Deposits) (Prescribed Information) Order 2007: Emily Richards. Please sign and return the enclosed counterpart to acknowledge receipt. Acknowledgement does not affect any of your statutory rights and, in particular, does not restrict your right to bring proceedings under section 214 of the Housing Act 2004. The landlord (or agent) confirms that, to the best of their knowledge and belief, the information given in this letter is accurate as at the date of this letter, as required by paragraph (g) of the Schedule to SI 2007/797.

DATA PROTECTION

Your personal data will be processed in accordance with the UK GDPR and the Data Protection Act 2018. The lawful bases for processing are contract performance (Article 6(1)(b)) and legal obligation (Article 6(1)(c) — the duties under Part 6 of the Housing Act 2004). An accessible format of this letter is available on request in accordance with the Equality Act 2010.

LANDLORD

David and Helen Carter

Date: ____________________

TENANT 1

Emily Richards

Date: ____________________

What Is a Tenancy Deposit Protection Letter?

A tenancy deposit protection letter is a formal written notice from a landlord to a tenant confirming that the tenant security deposit has been placed in a government-authorised tenancy deposit protection scheme. The letter provides the prescribed information that the landlord is legally required to give to the tenant within 30 days of receiving the deposit.

Under the Housing Act 2004, landlords in England and Wales must protect any deposit taken in connection with an assured shorthold tenancy in one of the three government-authorised schemes: the Deposit Protection Service (DPS), MyDeposits, or the Tenancy Deposit Scheme (TDS). They must also serve the prescribed information on the tenant and any relevant person (such as a guarantor who paid the deposit).

Failure to protect the deposit or serve the prescribed information has serious consequences under UK law: the British landlord cannot serve a valid Section 21 notice, and the tenant can apply to the county court in England and Wales for a penalty of between one and three times the deposit amount.

What's Covered in This Template

Doxuno's deposit protection letter template provides the prescribed information required by law in a clear and professional format.

Landlord Details

Full name, address, and contact details of the landlord or their agent.

Tenant Details

Full name and address of the tenant whose deposit has been protected.

Property Address

The address of the rental property to which the deposit relates.

Deposit Amount

The exact amount of the deposit that has been protected.

Protection Scheme Details

The name and contact details of the deposit protection scheme used, and the unique deposit reference number.

Scheme Type

Whether the deposit is held in an insured or custodial scheme and what this means for the tenant.

Reasons for Deductions

The circumstances under which the landlord may make deductions from the deposit at the end of the tenancy.

Dispute Resolution

Information about the free alternative dispute resolution (ADR) service provided by the scheme.

How to Get Deposit Back

The procedure for requesting the return of the deposit at the end of the tenancy.

Tenant Acknowledgement

A section for the tenant to confirm receipt of the prescribed information.

How to Create Your Deposit Protection Letter

Follow these steps to create a compliant deposit protection letter that meets the prescribed information requirements.

1
Protect the deposit
Place the UK deposit in one of the three government-authorised schemes (DPS, MyDeposits, or TDS) within 30 days of receiving it in England and Wales. Note the deposit reference number issued by the British scheme.
2
Enter the required details
Provide the landlord and tenant names and addresses, the property address, the deposit amount, and the protection scheme details including the reference number.
3
Include scheme information
Add the scheme name, address, contact details, and information about how the tenant can access the ADR service in case of a dispute.
4
List the grounds for deductions
Specify the circumstances under which deductions may be made, such as damage beyond fair wear and tear, unpaid rent, or cleaning costs.
5
Serve on the tenant
Send the completed letter to the tenant and any relevant person within 30 days of receiving the deposit. Keep proof of service and have the tenant acknowledge receipt.

Legal Considerations

Tenancy deposit protection is a strict legal requirement with significant penalties for non-compliance. Landlords must understand their obligations fully.

This template is for informational purposes only and does not constitute legal advice. Consult a qualified solicitor for advice specific to your situation.

Reviewed for England & Wales law

30-Day Deadline

The UK deposit must be protected and the prescribed information served within 30 days of the British landlord receiving the deposit. This is a strict deadline under English law. The 30 days begins from the date the deposit is received in England and Wales, not the date the tenancy starts. Late protection may still expose the British landlord to penalties.

Penalties for Non-Compliance

If the UK deposit is not protected or the prescribed information is not served, the British tenant may apply to the county court in England and Wales for an order requiring compliance and a penalty of between one and three times the deposit amount. Additionally, the UK landlord cannot serve a valid Section 21 notice until the situation is rectified under English law.

Prescribed Information Content

The UK Housing (Tenancy Deposits) (Prescribed Information) Order 2007 specifies the information that British landlords must provide in England and Wales, including the scheme details, the landlord and tenant details, the property address, the deposit amount, the circumstances for deductions, and information about the ADR process under English law.

Ongoing Protection

The UK deposit must remain protected for the entire duration of the tenancy in England and Wales, including any statutory periodic tenancy that follows the fixed term. If the British tenancy becomes periodic, some UK schemes require re-protection or confirmation that the deposit remains protected.

Frequently Asked Questions

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