The government is planning to make it easier for banks to offer accounts to undischarged bankrupts by removing the potential for a trustee claim on any money in the account, following concerns over the difficulties bankrupts face in handling day to day transactions without a bank account.

Currently there is no law specifically preventing a person who is bankrupt from holding a bank account. However a trustee in a bankruptcy can, in limited circumstances, consider pursuing the bank for loss of money paid out from the bankrupt's account.

An amendment to the draft Deregulation Bill, brought by the Insolvency Service, will now mean that unless a bank has received a specific notice from a bankruptcy trustee about an asset which will benefit the estate and which the trustee is interested in, they are protected against claims from that trustee.

Business minister Jo Swinson said: 'I am pleased that we are now closer to removing barriers that have prevented banks from providing bank accounts for bankrupt people in the past. A bank account is not a luxury in this day and age, but a necessity. Most everyday transactions take place online including shopping, paying for utilities and receiving salaries.'

In 2012, around 30,000 people were declared bankrupt and a similar number took up Debt Relief Orders. While banks will still have the final decision on offering accounts, applicants in both categories will be covered by the new legislation.

Citizens Advice chief executive, Gillian Guy, said: 'This change in insolvency law is a fundamental step towards making sure everyone has access to a bank account. With universal credit around the corner, it is even more important that everyone can get access to a bank account.'