Could you live without a bank account? EXCLUSIVE KEEPING YOUR MONEY SAFE CREDIT CRUNCH CRISIS.

Byline: BY JULIE MCCAFFREY

IF you think that the banking crisis means it's safer to stuff cash under the mattress, then you're not alone.

According to a survey last month, just 16 per cent of us trust high street banks now, compared to a third a year ago. And sales of home safes are soaring.

The Citizens Advice Bureau says one in 12 households - 2.8 million adults in the UK - did not have any kind of bank account in 2006.

But how easy is it to go through day-to-day life without one?

Jasmine Birtles, finance expert at moneymagpie.com, says: "Life is a lot harder without a bank account, and can be more costly. You can do it - but I wouldn't."

Here's how getting shot of your bank account would affect your life...

SALARY

SOME employers will refuse to pay salaries to staff who don't have a bank account.

However, others - like Tesco - will pay your wages to a pre-paid credit card. These cards can be loaded with cash at shops or post offices, but will not let you spend over your pre-paid limit. And they will give you the 14-digit number you often need to receive payments.

However, many have purchase fees which can be as high as pounds 14.95, as well as monthly or transaction fees. Paysafe cards (paysafecard.com) have no fees.

Jasmine says: "If your employer offers to pay you cash-in-hand, beware. This means you're unlikely to be on their books so they might not pay your tax and national insurance.

"That waives some of your employee rights and means they could sack you at any time. But many people are doing it - our black market economy is worth an annual pounds 4billion."

MORTGAGE

ALTHOUGH mortgage lenders do not have a rule which declines applications from people without bank accounts, practicalities mean they are rarely accepted.

Stuart Wilson, managing director of the Mortgage Advisory Service, says: "Mortgage lenders will consider applications from people with no bank accounts, but their credit history has to be taken into account and that can be seriously affected if you have no bank account.

"Their second consideration would be how the client would pay their mortgage if it didn't happen by direct debit or standing order. In my 20 years in the industry, I've never known anyone to get a mortgage without having a bank account."

RENT

SOME private landlords will accept cash for room rental, but the vast majority prefer the security of knowing they have your bank details so you won't be able to disappear. Remember you waive tenant rights if you pay by cash.

FUEL BILLS

MEETING energy bills by pre-payment meter, despite paying in advance, costs much more than paying quarterly by direct debit or online.

Bills can also be paid at PayPoint locations (paypoint.com). Energy companies prefer customers to pay by direct debit or standing order because it's easier, quicker and cheaper for them to collect payment.

Russell Guthrie of Consumer Focus advises against the costly pay-bymeter method. He says: "Those who settle their energy bills via a prepayment meter pay around pounds 400 a year more than those who pay online."

BROADBAND

A BANK account is a prerequisite for most broadband suppliers, so they can secure payment before granting you their services.

But remember that some public places have free WiFi - coffee shops, bars and libraries are useful places to get connected.

You could also buy a dongle, a mini-modem shaped like a USB memory stick that connects to your laptop and provides broadband access wherever there's mobile phone signal.

They can be bought at mobile phone shops in cash and topped up on a pay-as-you-go basis - although contract dongles, which require a bank account, are cheaper.

MOBILE PHONE

ALL mobile phone shops sell pay-as-you-go handsets, which can be bought in cash and pre-loaded with credit.

As for contract phones without bank details, forget it.

LAND LINE

IT'S not possible to be connected to a landline without first providing bank details. But bills can be paid at the post office - although this costs more.

BT customers opting not to pay by direct debit or a monthly payment plan automatically incur a paymentprocessing fee of pounds 1.50 a month or pounds 4.50 per quarter.

SATELLITE TV

VIRGIN Media will let you open an account by checking your current and previous addresses, and bills can be paid through PayPoints in many shops and post offices.

A Sky spokesman said: "Our policy is that we don't accept new customers without a bank account or credit card. We'll be flexible in certain circumstances, for example people with disabilities who are unable to have a bank account.

"If an existing customer closed their bank account, they could opt to monitor their Sky account online and pay us by cash or postal order over the counter at a bank or post office."

BUYING ONLINE

YOU can open a Next Directory or Littlewoods Direct account without bank details. You can pay for Littlewoods catalogue or online purchases by postal order, with a 50p surcharge. And Next accepts postal orders and gift cards, which must be sent registered post (pounds 1.07).

For online shopping, most sites will accept a prepaid credit card, or you could give cash to a card-holding friend in exchange for vouchers.

CARS

IF you have wads of cash, you can buy whatever you want. Jasmine says: "If you have pounds 7,000 to pay for a car, go right ahead - you're likely to get a good deal on the bottom line.

"Car rental companies will often accept your cash but usually take another surety from you, such as your passport or driving licence, so you don't disappear."

INSURANCE

JASMINE says: "Most insurance companies will allow you to pay all home, car or life insurance policies online or over-the-phone by pre-paid credit card, but it means you will have to pay the total amount in one lump sum. Many banks also offer insurance, and you could pay over the counter."

HOLIDAYS

FRANCES Tuke of travel association ABTA says: "You can book a foreign holiday, flights or hotel with cash if you use an ABTA travel agent without losing insurance protection.

"If you book a package holiday you are protected by European package travel regulations.

"If you book flights or hotels only on your own, you won't have the same protection. But your travel agent could offer you an insurance policy."

CAPTION(S):

SLEEP ON IT How easy is it to live off the cash stashed under your mattress?