How do banks alert you about a risk of a regular payment having insufficient funds?

gwapenut

I'm talking here about unauthorised overdraft territory. Moving from employed to retired, I need to ensure a regular stream of money each month to service regular savers etc. Some withdrawals, such as from Premium Bonds, are slightly less deterministic than others, and there is always the possibility of forgetting to schedule a withdrawal.

So yesterday I trialled setting up standing orders for tomorrow, well in excess of my available balance. I was hoping to find a bank which alerted me that tomorrow a payment may be declined, but so far I've not had a single message from Nationwide, Virgin, Monzo, Lloyds, or Santander. I am particularly surprised at the silence from Nationwide who, every month, let me know that I'm at risk of using my arranged overdraft when I have a payment out the next day, and the funds to cover it only appear on the same day.

I have checked my Santander alerts and do have them ticked for "insufficient funds to meeting a regular payment" - but have received nothing.

Does anyone have any experience of what would happen if a standing order went out one day without available funds coming in? Does any bank let you know, preferably the day before but potentially on the day itself with a "we can only make this payment if you provide funds today" message? Could the silence be because this is the first instance of the standing order?

I've even looked at the open banking apps. None of them seem to support this kind of pre-emptive alert either, so why they think I'm going to give them all my data in return for no extra features is anybody's guess.

baser999

I’m with Santander and have account balance warnings set up which I find a useful prompt. Having said that it doesn’t seem to be as instantaneous as you’d expect. For example I’ve topped up a low balance at night and then the following morning I’ll get notice the balance is below my set limits. Still find the system useful though.
Not sure you’ll get any bank operate a pre-emotive alert system. 

Could you set up a diary entry on your phone perhaps to flag up a few days ahead of major items being paid in/out

gwapenut

Yes I am aware of the balance warnings but they would not work for me. Effectively I'd be running a low balance most of the month, with £7k in from savings and out to regular savers once per month. I'd be using it as my main current account too, but the £7k dwarfs any residual amount left for ongoing bills.

baser999

Move the dates of money transfers? 

gwapenut

That doesn't help, even if I allow a week extra, I can't trap the situation where I forget to schedule a withdrawal from my savings account. And I can't use a balance alert because, for most of the month, my balance will be below £7k.

gwapenut

I'm particularly interested in hearing from someone who has had a payment out rejected,a nd how it is handled - does any bank give you a chance to top up the balance on the day, and then they make the scheduled payment?

piker57

We have accounts with Lloyds & Halifax both of which send an alert (you have to select it as an option).

If there’s insufficient funds the alert tells you the Standing Order won’t be paid & gives you until 2:30 to deposit sufficient funds before a second attempt to make the payment is conducted at 4pm.

We have standing orders set up from our main account with HSBC to meeting the account funding requirements with our Lloyds & Halifax accounts, with a corresponding standing order to send the money back to HSBC. Despite the HSBC deposit being recognised by both Lloyds & Halifax we get the alert to say the return STO can’t be paid, then around 5pm we get a notification to say it’s been paid. This notification arrives after the transaction which pings instantly from the HSBC App when the payment from LBG is received.

So I can definitely confirm LBG would satisfy your requirements 

Nebulous2

Nationwide does with me, but only on the morning of the payment. I'll have a DD due, I usually pay across money to cover it in the middle of the night (part of my round robin to meet funding requirements) They then send a text mid-morning, after the situation has been rectified, to say that I don't have enough in my account to meet an outgoing payment. 

It's a different conversation, but I'm retired, working part-time and I don't run my accounts as tight as I used to. I'd have a bigger buffer, spread across more than one account, in case they block transfers, to meet my potential requirements if I were you. 

Any bigger impulse spends go on my credit card, allowing time to withdraw money to pay it. 

masonic

gwapenut said:

I'm particularly interested in hearing from someone who has had a payment out rejected,a nd how it is handled - does any bank give you a chance to top up the balance on the day, and then they make the scheduled payment?

I've not been in this position, but with First Direct, it is possible configure their text alerts to give you a daily update every morning that there is any activity on the account. This allows me to keep a watchful eye on the account. Most banks signed up to a "same day retry system" 10 years ago. See https://www.fca.org.uk/news/press-releases/fca-secures-commitment-high-street-banks-use-‘retry-system’-when-processing

wiseonesomeofthetime

First Direct paid my standing order out and then sent me a text to say I had entered unauthorised overdraft.

I had forgotten to cancel the SO which was to a filled regular saver at another provider .

On that occasion,I paid the £200 in to cover it, cancelled the SO, and remarkably did not incur a fee 🤷‍♂️

Also got my £200 back from the provider as it bounced due to RS being full.

Win win , that time!

DullGreyGuy

Barclays and Starling apps both message and give you to Xpm to move sufficient funds into the account to avoid charges