Barclays Removing overdraft

Robintones

I have been with Barclays for nearly fifty years. And in that time, even as a student, I can't remember having to use an overdraft. However, at the moment I am keeping all my funds in fixed bonds or high-interest accounts where moving cash incurs a penalty, so the short-term cost of an overdraft may be cheaper than the loss of interest.   Barclays have sent my wife and I letters saying that they are removing these overdrafts.  I rang and after waiting thirty minutes (dreadful) they made me go through an "income review" (The department involved is called deepening customer relations). I explained that as I am retired I am in drawdown and manage income to minimise tax and am currently using my non-pension funds as proposed by my financial advisor. Barclays evidently don't look at assets and are more concerned with child care costs! They asked me why I wanted the overdraft facility, I explained that they are a useful tool for managing my money. They had no comprehension of people at my stage in life.  So, I presume that they had calculated with their purely internal review, that I'm not financially stable enough for an overdraft. I was surprised when they then sent me a message saying that I was pre approved for a thirty thousand pound unsecured loan! (we would need to discuss the interest rates).  Can I assume from this that Barclays are once again trying to shed "potential debt" from their books to change how they are seen for a financial review? Should I be worried that a company that, can't afford staff to man the phones, doesn't communicate between departments and is risking losing quality customers to improve their liquidity rating, is in trouble?  I am looking to move banks now and will be reading recommendations for banks which understand retired but "not dead yet" customers.

Hoenir

Cutting to the business end. How often do you use the overdraft facility? 

Robintones

How often do you use insurance or a safety net when you walk a high wire, or even an airbag in a car?

MattMattMattUK

Robintones said:

How often do you use insurance or a safety net when you walk a high wire, or even an airbag in a car?

That is irrelevant. You can manage your finances in a way that an overdraft is not required. It costs banks to have an overdraft facility available even if you never use it.

You are also missing the point that when looking at affordability when lending banks are not allowed to look at assets, but only income. If you currently have zero/minimum income then you will fail the affordability criteria for that borrowing, hence them withdrawing the overdraft. 

MEM62

Robintones said:

How often do you use insurance or a safety net when you walk a high wire, or even an airbag in a car?

Maybe just as infrequently but you pay for each of those to be there just in case.  You only pay for an OD when you use it.  By your own admission you have not used the facility in 50 years.  It is easy to see why Barclays would rather have the exposure off their books.    

GeoffTF

Back in 2020 Barclays were reported to be slashing credit limits on their Barclaycards, often to from thousands of pounds to a few hundred. I applied for one and got a healthy credit limit, but I have never used more than a third of it.

friolento

MattMattMattUK said:

Robintones said:

How often do you use insurance or a safety net when you walk a high wire, or even an airbag in a car?

That is irrelevant. You can manage your finances in a way that an overdraft is not required. It costs banks to have an overdraft facility available even if you never use it.

You are also missing the point that when looking at affordability when lending banks are not allowed to look at assets, but only income. If you currently have zero/minimum income then you will fail the affordability criteria for that borrowing, hence them withdrawing the overdraft. 

Someone who is in pension drawdown has arguably a more secure income than someone who could lose their job tomorrow. I suspect Barclays are in the process of reducing their liabilities, since overdrafts do contribute to the liabilities on their balance sheet. All part of a massive cost cutting exercise.

wmb194

friolento said:

MattMattMattUK said:

Robintones said:

How often do you use insurance or a safety net when you walk a high wire, or even an airbag in a car?

That is irrelevant. You can manage your finances in a way that an overdraft is not required. It costs banks to have an overdraft facility available even if you never use it.

You are also missing the point that when looking at affordability when lending banks are not allowed to look at assets, but only income. If you currently have zero/minimum income then you will fail the affordability criteria for that borrowing, hence them withdrawing the overdraft. 

Someone who is in pension drawdown has arguably a more secure income than someone who could lose their job tomorrow. I suspect Barclays are in the process of reducing their liabilities, since overdrafts do contribute to the liabilities on their balance sheet. All part of a massive cost cutting exercise.

It also frees up capital to lend it to other customers.

flaneurs_lobster

OP hasn't mentioned the size of overdraft facility that might be required nor for how long. Would a credit card not cover any short term cash requirement?

Hoenir

Robintones said:

How often do you use insurance or a safety net when you walk a high wire, or even an airbag in a car?

In life you can either be a rock or a sponge. Choice is yours to make. 

Robintones

MattMattMattUK said:

Robintones said:

How often do you use insurance or a safety net when you walk a high wire, or even an airbag in a car?

That is irrelevant. You can manage your finances in a way that an overdraft is not required. It costs banks to have an overdraft facility available even if you never use it.

You are also missing the point that when looking at affordability when lending banks are not allowed to look at assets, but only income. If you currently have zero/minimum income then you will fail the affordability criteria for that borrowing, hence them withdrawing the overdraft. 

Matt, How can the same bank deem an overdraft unaffordable but a short-term unsecured loan ten times bigger affordable?