UK Deposit Protection Scheme: TDS, MyDeposits, DPS Explained

Tenancy deposits in England and Wales must be protected in a government-approved scheme within 30 days of receipt. Three schemes are authorised — the Deposit Protection Service (DPS), MyDeposits, and the Tenancy Deposit Scheme (TDS) — each offering both custodial and insured options. This deep-dive explains the legal framework under the Housing Act 2004, how the schemes differ, and what landlords must do to comply, including how the regime sits within the new Assured Periodic Tenancy (APT) world post-Renters’ Rights Act 2025.

The Legal Framework

Deposit protection is governed by Part 6 of the Housing Act 2004, sections 212–215C. The full Act: https://www.legislation.gov.uk/ukpga/2004/34/contents.

Key provisions:

• Section 213(1) — Any deposit taken in connection with an assured tenancy must be protected in an authorised scheme
• Section 213(3) — Protection must be effected within 30 days of receipt
• Section 213(5)–(6) — The “Prescribed Information” must be served on the tenant within 30 days
• Section 214 — Tenant remedies for non-compliance (1× to 3× the deposit)
• Section 215 — Restrictions on serving Section 21 notice without compliance (note: Section 21 abolished by RRA 2025 from 1 May 2026; restrictions on Section 8 grounds remain relevant)

The Renters’ Rights Act 2025 (effective 1 May 2026) does not amend the deposit protection regime in substance — it remains within the Housing Act 2004 — but tenancies post-1 May 2026 are Assured Periodic Tenancies (APTs), not assured shorthold tenancies (ASTs).

Government overview: https://www.gov.uk/tenancy-deposit-protection.

The Deposit Cap — Tenant Fees Act 2019

Before deposit protection comes the deposit cap. Under the Tenant Fees Act 2019, Schedule 1, the deposit a landlord may take is capped:

• 5 weeks’ rent if annual rent < £50,000
• 6 weeks’ rent if annual rent ≥ £50,000

The 5/6 weeks cap is the absolute ceiling. There is no separate pet deposit; pet damage is addressed through insurance or rent surcharge (note the new RRA 2025 statutory pet right). Demanding more than the cap is a civil offence under the 2019 Act, with penalty up to £5,000 for a first breach and £30,000 for repeats.

• Tenant Fees Act 2019: https://www.legislation.gov.uk/ukpga/2019/4/contents

The Three Authorised Schemes

1. Deposit Protection Service (DPS)

• Operator: Computershare Investor Services PLC
• Custodial: Yes — free of charge for landlords (DPS holds the money)
• Insured: Yes — landlord pays a fee per deposit; landlord holds the money but pays a premium so DPS underwrites it
• Website: https://www.depositprotection.com/

DPS is the largest scheme by volume. The custodial option is free and requires the landlord to transfer the deposit to DPS to hold; the deposit returns automatically to the tenant at the end (or via dispute resolution if disputed).

2. MyDeposits

• Operator: Hamilton Fraser
• Custodial: Yes
• Insured: Yes
• Website: https://www.mydeposits.co.uk/

MyDeposits is widely used by smaller landlords and letting agents. The insured option allows the landlord to retain the deposit but pay a per-deposit insurance premium.

3. Tenancy Deposit Scheme (TDS)

• Operator: The Dispute Service Ltd
• Custodial: Yes
• Insured: Yes
• Website: https://www.tenancydepositscheme.com/

TDS operates both schemes and has a strong dispute resolution reputation. Many letting agents are members of TDS.

All three schemes provide:

• A free Alternative Dispute Resolution (ADR) service for end-of-tenancy disputes
• Online deposit registration and certification
• Standard Prescribed Information templates

Custodial vs Insured — Choosing Between

Custodial Schemes

• Landlord transfers the deposit to the scheme
• Scheme holds the money throughout the tenancy
• Free for the landlord (the scheme earns interest on aggregated funds)
• Lower administrative risk — scheme literally has the money
• At end of tenancy, scheme returns it (with split if disputed)

Insured Schemes

• Landlord retains the deposit in their own bank account
• Landlord pays a per-deposit insurance premium
• Scheme provides ADR and indemnity for tenant non-payment
• Useful for landlords who want immediate access to funds during the tenancy (e.g. for repairs in the rare event a tenant agrees deductions mid-tenancy)
• More administrative responsibility on the landlord

Most landlords with one or two properties choose custodial — it is free and removes the obligation to safeguard segregated client money.

The Prescribed Information

Under section 213(5) Housing Act 2004 and the Housing (Tenancy Deposits) (Prescribed Information) Order 2007, the Prescribed Information includes:

• The amount of the deposit paid
• The name and contact details of the scheme
• The name and contact details of the landlord and tenant
• The address of the property
• The circumstances when all or part of the deposit may be retained
• A statement signed by the landlord that the information given is accurate

The Prescribed Information must be served on the tenant within 30 days of receipt of the deposit. Each authorised scheme provides a template.

The 30-Day Rule — Both Halves

Two things must happen within 30 days of deposit receipt:

1. Deposit lodged in scheme (custodial) or insurance taken out (insured)
2. Prescribed Information served on tenant

Best practice: do both on the day the deposit is received. The 30-day period is the statutory ceiling, not a target.

Penalties for Non-Compliance — Section 214

If the landlord fails to comply, the tenant (or relevant person who paid the deposit) may apply to the County Court under section 214. The remedies available:

• Order for return of the deposit (if the tenancy has ended) or for protection (if continuing)
• Order for the landlord to pay the tenant or relevant person between 1× and 3× the deposit
• Restriction on the landlord’s ability to bring possession proceedings on certain Section 8 grounds (preserved in the post-RRA 2025 regime)

The 1× to 3× penalty is at the court’s discretion based on culpability. Inadvertent late filing usually attracts 1× to 1.5×; deliberate non-protection 3×.

End of Tenancy — How the Scheme Returns the Deposit

Custodial route

1. Tenancy ends; tenant claims deposit through the scheme
2. Landlord either confirms full refund or disputes deductions
3. If undisputed: scheme returns to tenant (typically within 10 days)
4. If disputed: scheme’s free ADR is invoked. Each side submits evidence (inventory, photos, receipts). An adjudicator decides

Insured route

1. Tenancy ends; landlord and tenant agree deductions or dispute
2. Landlord returns undisputed amount within 10 days
3. Disputed amount: scheme’s ADR or court

Common Mistakes — Gyoseishoshi View

1. Lodging late. Day 31 is too late. Penalty 1× to 3× the deposit + restriction on possession.

2. Forgetting the Prescribed Information. Lodging the deposit alone is not enough — the tenant must receive the Prescribed Information separately.

3. Demanding a separate pet deposit. Not allowed. The 5/6 weeks cap is the absolute ceiling. Pet damage must be addressed through insurance or rent surcharge under the RRA 2025.

4. Treating the deposit as the landlord’s money. It is the tenant’s money held against possible claims. Comingling with personal funds (insured route) creates serious problems if the landlord becomes insolvent.

5. Not re-protecting on tenancy renewal. A new fixed-term renewal is not relevant from 1 May 2026 (no fixed terms). For converting ASTs, the deposit does not need re-protecting on conversion to APT — but a fresh deposit for a new tenant always needs fresh protection.

6. Not updating the Prescribed Information on landlord change. If the property is sold during the tenancy, the new landlord must re-serve updated Prescribed Information.

7. Confusing the scheme with the landlord. The scheme holds (or insures) the money but does not adjudicate without an ADR application. The landlord remains the contractual counterparty.

Practical Workflow — Day of Move-In

Conclusion

Deposit protection is one of the simplest landlord obligations: choose a scheme, lodge within 30 days, serve the Prescribed Information within 30 days. The cost is zero (custodial) or modest (insured). The penalty for getting it wrong — 1× to 3× the deposit plus restrictions on possession — is severe and routinely enforced. The Renters’ Rights Act 2025 does not change the regime in substance, only the surrounding tenancy structure (APT replaces AST). Same workflow, new world.

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Disclaimer

This article provides legal information, not legal advice. MmowW Scrib🐮 is a document preparation service operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not solicitors, barristers, or attorneys.

Sources

1. Housing Act 2004 (Part 6 — deposit protection): https://www.legislation.gov.uk/ukpga/2004/34/contents
2. Tenant Fees Act 2019: https://www.legislation.gov.uk/ukpga/2019/4/contents
3. Tenancy deposit protection — gov.uk overview: https://www.gov.uk/tenancy-deposit-protection
4. Tenant Fees Act 2019 guidance: https://www.gov.uk/government/publications/tenant-fees-act-2019-guidance
5. Renters’ Rights Act 2025: https://www.legislation.gov.uk/ukpga/2025/26/contents