It is not just banks, you could get mail from lots of different people, that needs answering if you want to go back to your old way of life.
It would be nice to think that we could all simply walk away from all bureaucracy and paperwork, best not to though, if your driving license photo ID expires and you don't renew it you may be fined, if you don't update the DVLC with 'your normal address' you may be fined. someone may clone your bank card and the bank won't be able to confirm whether or not you are the one spending all your money.
The Iphone has lots of issues that make it a problem for what he wants to do...
My growing dislike for Apple would prevent me from ever owning an iPhone which is why I also suggested the OpenMoko, much lighter than a netbook, easier to protect from theft, damp and bumps. No movies though, you'd just have to go to the cinema instead.

I have scanned several books and converted them to HTML which allows me to read them on a small Fugitsu PDA, it has a long battery life and it is much lighter that carting forty odd books around with me

As someone else said watch the dole, best bet with them is go in(Most Honest), and register, but say you are not going to look for work
By all means speak to the dole people, but get a letter of to the Taxman too, do not rely on the Social Security people to do it for you, the Taxman is the most important person to keep straight.