Which scheme should I pick?

For a first-time landlord, DPS Custodial is the safest because the scheme holds the money and the dispute process is included. For experienced portfolio landlords TDS Insured offers more flexibility.

What happens if I miss the 30 day deadline?

The tenant can sue for one to three times the deposit amount and you cannot serve a Section 21 notice. Late protection does not cure the breach; treat the 30 days as immovable.

Is a holding deposit the same as a tenancy deposit?

No. A holding deposit reserves a property before the tenancy starts and is capped at one week's rent under the Tenant Fees Act 2019. A tenancy deposit is the larger sum (typically five weeks' rent) protected during the tenancy.

Tenant deposit protection schemes explained for UK landlords (2026)

Updated 2026-05-21 · 6 min read

If you take a deposit from a tenant on an assured shorthold tenancy in England or Wales, you are legally required to protect it in one of three government-approved schemes within 30 days and serve the tenant with prescribed information in the same window. Get it wrong and you cannot serve a valid Section 21 notice, you owe the tenant up to three times the deposit, and you cannot evict without a Section 8 ground. This guide covers the rules in plain English plus the practical choices.

The three approved schemes

England and Wales: the Deposit Protection Service (DPS), MyDeposits and the Tenancy Deposit Scheme (TDS). Scotland has its own three schemes: Letting Protection Service Scotland, MyDeposits Scotland and SafeDeposits Scotland. Northern Ireland uses LPS NI, MyDeposits NI and TDS NI.

All schemes are free to use for the custodial option (the scheme holds the money). The insured options charge an annual or per-tenancy fee but let you hold the cash yourself. Functionally the protection is the same in court.

Custodial versus insured

**Custodial:** the scheme holds the deposit for the duration of the tenancy. Free for landlords. Faster dispute resolution because the money is already with the scheme. Recommended for first-time landlords and anyone who would otherwise be tempted to dip into the deposit.

**Insured:** the landlord holds the deposit but the scheme insures any future payout if a dispute resolution decides in the tenant's favour. Costs typically £20-£35 per tenancy. Useful for portfolio landlords who use deposits as float, but introduces risk if you fail to pay back on demand.

The 30-day clock and prescribed information

Within 30 days of receiving the deposit you must: protect the money in a scheme, give the tenant the scheme's deposit certificate, give the tenant the scheme's prescribed information leaflet, and confirm in writing the address of the property, the amount, the scheme name and contact details, and how the tenant can apply for dispute resolution.

The 30-day clock starts the day the deposit is received, not the day the tenancy starts. Late protection does not retrospectively cure the breach. The tenant can sue at any point during the tenancy, even after the deposit is returned.

What counts as a deposit

Any sum paid to the landlord, agent or third party in connection with the tenancy that is intended to be returned at the end is a deposit and must be protected.

Two things that are not deposits: holding deposits (intended to reserve a property pre-tenancy, capped at one week's rent under the Tenant Fees Act 2019) and pre-paid rent for the first period. Both have separate rules.

Penalties for non-compliance

If the deposit is unprotected, the tenant can sue for one to three times the deposit amount. The court typically awards two or three times for repeat or wilful breaches. You cannot serve a valid Section 21 notice while in breach.

Late protection (after 30 days but before the case goes to court) does not bar the claim. Return the deposit in full only after the tenant has signed off on any deductions; do not unilaterally net off cleaning or wear-and-tear without going through the scheme dispute process.

Common questions

Which scheme should I pick?: For a first-time landlord, DPS Custodial is the safest because the scheme holds the money and the dispute process is included. For experienced portfolio landlords TDS Insured offers more flexibility.
What happens if I miss the 30 day deadline?: The tenant can sue for one to three times the deposit amount and you cannot serve a Section 21 notice. Late protection does not cure the breach; treat the 30 days as immovable.
Is a holding deposit the same as a tenancy deposit?: No. A holding deposit reserves a property before the tenancy starts and is capped at one week's rent under the Tenant Fees Act 2019. A tenancy deposit is the larger sum (typically five weeks' rent) protected during the tenancy.