Standing orders on pay day

MoneyWorries2014

Hello
We are moving house on the 16th and the estate agent says the rent will have to be paid on the 16th.
I get paid on the 16th of each month so.. is it possible that they try to take the rent before my salary has been paid in and then bounce back the payment? Does anybody know how this works?

We tried to ask the agency to pay 2-3 days in advance so that the following months our rent comes out on the 18th or 19thof each month, but they said that it wasn't possible to do they. That if we move in on the 16th, rent has to be paid on the 16th...

I'm new. Not sure if this is the right place to post this question...apologies if is isn't.

Thank you!

YorkshireBoy

It's never a good idea to have SOs (and DDs for that matter) scheduled for payday unless you've an overdraft facility in place.

Almost all banks' T&Cs say you must have cleared funds (to meet outgoing payments) in the account at close of business on the previous bank working day. Failure to do so can result in fees and charges as you suspect, despite being back in credit at the close of business on the 16th.

SnowTiger

MoneyWorries2014 wrote: »

Hello
We are moving house on the 16th and the estate agent says the rent will have to be paid on the 16th.
I get paid on the 16th of each month so.. is it possible that they try to take the rent before my salary has been paid in and then bounce back the payment? Does anybody know how this works?

I my experience, banks process payments going in to an account before payments that come out.

But that may depend on the bank, be coincidence or luck.

Is the payment really a Standing Order (as mentioned in the title)?

If it is, you have control over it. I would simply cancel the Standing Order and make the payment manually after my salary had hit the account. Very simple to do with online banking.

MoneyWorries2014 wrote: »

We tried to ask the agency to pay 2-3 days in advance so that the following months our rent comes out on the 18th or 19thof each month, but they said that it wasn't possible to do they. That if we move in on the 16th, rent has to be paid on the 16th...

You want to pay your rent nearly a month in advance? Can't you sit on it for a month until it's needed?

MoneyWorries2014

I'm with Lloyds so I'm going to give them a call and find out.

SnowTiger - we rent through an agency so we need to set up a standing order to them. Originally we wanted to move in on the 11th but they said that would mean we'd have to pay rent on the 11th of each month which is end of month for me. I would sit on the money, but as we have to pay one months rent in advance, on the 16th august I'll be paying the rent, so by the 15th September I won't have anything to sit on...and most of our savings have gone into the deposit + agency fees.

The easiest solution for us would be to pay 2 extra days, and then have the rent come out on the 18th, but the agency is refusing to accept that option. They say all dates have to tally... Move in date = day when rent comes out.

Nada666

You will just have to budget in an extra month's buffer. Technically you should do this as a matter of course - you should have just over double your debits and orders in your payment account and run them down to one not zero.

And this is precisely the sort of thing an overdraft is for. If you have one use it for a month or two to build up your buffer.

MoneyWorries2014

Rent is £1,275pcm... I don't have enough buffer to have two months rent worth in my account :-/

masonic

It rather sounds like you are going to have to borrow to meet the shortfall in one form or another. As mentioned, an overdraft would be the best way. Are you going to be in a position to build up the balance of your account gradually over the coming months, or will you be spending all of your income month to month?

PasturesNew

They like to take it a day or two before, so it "clears" on the rent day. Mine started off like that, then they changed it after some months to come out even earlier ... it started as rent day on 24th and ended as money taken on 20th.

Sanne

With all our rentals so far (3x letting agent, 1x direct with landlord) the rent had to be in their account by the date (or on the previous working day if it was a weekend) so we made sure we had the money going out a couple of days ahead.

It's a pain (we've had rent going out on various dates across the month, depending on when we moved in - but then, my pay date has changed with each job as well) - luckily we were always OK when it moved but that's what overdrafts are there for if required.
Obviously better if you can slowly built up some money so you won't need it after a while.

MoneyWorries2014

I will clarify that with the agency tomorrow (about when they need the payment). But I spoke to Lloyds and they told me it should be ok, as they try to make the payment in the morning, and if not enough funds they try again by 3.30pm that same day- without any charges. So it should be OK as my salary always gets paid just after midnight on the 16th.

Apparently as all payments are Fast Payments you don't need to set the SO a day or two before the due date, as with FP the payments are done within 2 hours.

If the agency kicks up a fuss about this, then I'm afraid we will have to push back our moving in date to the 18th... We've offered to pay 2-3 days extra to cover those two days we need to push the SO back to the 18th but they keep saying it isn't possible!

I'm the only one working, so saving is hard at the moment. We can save £150-£200 a month, it will take me a while to build up a months rent to have as back up...

YorkshireBoy

MoneyWorries2014 wrote: »

Apparently as all payments are Fast Payments you don't need to set the SO a day or two before the due date, as with FP the payments are done within 2 hours.

SOs, whilst using the FP system, are not sent on non-working days. Most (all?) banks will send the payment on the next working day. So if Good Friday falls on the 16th then your payment won't arrive until Tuesday 20th...4 days late! Even if it falls on a Saturday, your payment will be 2 days late.


This is generally at odds with wages paid by BACS Direct Credit, where they're paid the working day before, so in the first example above you'd get them on Thursday 15th.


I can see problems ahead for you, unless and until you can assemble a £1,275 buffer in your current account, as you may have to set up the SO for a few days before the 16th as suggested earlier.