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Sorting it out would start with just asking the landlord to protect it right?
I genuinely think she just doesn't know, the letting agency were a bit rough around the edges and she only bought the property a month or two before we moved in, she's late 20s and just seemed to have some cash lying around to bought a flat to let out
rogan-
You could take her to court and get up to 3x your deposit - I'm not saying you should, but you could. Not protecting your deposit is stupid, it's the one area where tenants actually have some protection. Have a look on the Shelter website, there's sample letters to send to your landlord to get her to stick the deposit in a scheme.
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You'd have to be an utter muppet to not know about the deposit protection scheme. Especially as a landlady!
I'd ask them if they are declaring it as income too. Can't remember any previous landlords of mine who did (maybe don't mention it, actually).
hats
rodabod
(Get it sorted out now if you can).