Barclays Removing overdraft

artyboy

Zanderman said:

Robintones said:

eskbanker said:

Robintones said:

eskbanker said:

Robintones said:

and currently, I have overdrafts which I can use. Why should I have them taken away for the convenience of Barclays?

Because it's entirely their decision about whether to lend you money or not, and overdraft terms always make it clear that these are a privilege rather than a right and can be withdrawn at any time - this can happen even if they're in use, but if, by your own admission, you've had one for nearly fifty years and never used it then it's less surprising that they take the view that it's unlikely to be needed.

I do take the point that it seems inconsistent that they offer a substantial loan instead though....

When you say you have overdrafts (plural), can't you use your non-Barclays one(s) if push came to shove?

You are right. I will move from them, just wondered if they were doing this to other older customers.

Are you under the impression that they're basing their decision on your age (as opposed to income, etc), and if so, based on what?

They had a script which they could not deviate from. It was based around income solely. Once you retire, you can change your income by managing how much you drawdown, which is a choice dependent upon activity and mostly tax considerations. So I would say that not understanding this stage of life is a factor. Obviously, people can retire at any age, but pension drawdown is only available after 55.

Actually I would suspect (I don't know, so happy to be corrected) that most people when they retire are not in drawdown with therefore variable income, certainly not traditionally. Pensions traditionally are a fixed sum, index-linked. Either though being DB or an annuity from DC.

So maybe the situation you're describing of poor comprehension relates simply to variable income - which can be at any age, not to pensions.  You don't need to be retired to have a variable income, and a variable income isn't more likely in retirement.

If so it may be incorrect to attribute this to 'stage of life' misunderstanding, more a variable income misunderstanding. Which seems more likely to me.

As others have said I'm not at all sure I understand your issue over the withdrawal of the overdraft facility you never ever used, but clearly your mileage is different to mine!   

That first point of yours has come up before but I think it's a very important one - society is already well into a shift away from 'traditional' DB and annuity based guaranteed retirement income, and towards variable drawdown. 

Whilst that comes with advantages to a lot of people - myself and Mrs Arty included - if banks are going to look at someone with a £30k pa annuity very differently from someone drawing down the same amount from a £1m drawdown pot, then it's far from ideal.

Yes I get it, you have market risk, you could theoretically withdraw it all to put it on Lucky Boy in the 3:30 at Chepstow, etc. It's not truly 'guaranteed' income. But I'll be a bit narked if I can't still play the 'financial perks' game once I'm finally fully retired.

Their game, their rules (to an extent), but I'll be making sure I've got the best long term credit card options sorted before I do make that leap...

Shakin_Steve

[Deleted User] said:

You are not a good customer to them - you appear past needing borrowing, have a low disposable income for them to sell you their investment or savings products plus don't appear brand loyal (e.g. don't mention Barclays products such as insurance).

The reason they are happy to approve a loan is that they actually make money until repaid; an unused overdraft costs them reduced lending elsewhere and makes them no money from you.

On a wider note - I was slightly disturbed to see that someone thinks that some banks 'care' about their customers. This one doesn't nor do any of the other ones including quasi-bank Nationwide. 

I get texts all the time from Barclays telling me that I have been pre-approved for a loan of up to £50,000. I know that, in reality, I would have no chance of passing the affordability tests. They just use a scattergun approach and I dare say some people do pass those tests.

Zanderman

Shakin_Steve said:

[Deleted User] said:

You are not a good customer to them - you appear past needing borrowing, have a low disposable income for them to sell you their investment or savings products plus don't appear brand loyal (e.g. don't mention Barclays products such as insurance).

The reason they are happy to approve a loan is that they actually make money until repaid; an unused overdraft costs them reduced lending elsewhere and makes them no money from you.

On a wider note - I was slightly disturbed to see that someone thinks that some banks 'care' about their customers. This one doesn't nor do any of the other ones including quasi-bank Nationwide. 

I get texts all the time from Barclays telling me that I have been pre-approved for a loan of up to £50,000. I know that, in reality, I would have no chance of passing the affordability tests. They just use a scattergun approach and I dare say some people do pass those tests.

Agree, I suspect many so-called 'pre-approved for a loan/credit card/whatever' messages turn out to not be 'pre-approved' at all if you follow them through.

The OP's highlighting of the apparent mismatch of removing an overdraft whilst offering a loan seems incorrect to me.  There may be no 'mismatch' - as the loan offer may not be real. And even if the loan offer is real a loan, as FredTrump pointed out above, is a definite income for the bank as interest is actually paid, but an overdraft is merely an ongoing risk (on the bank's books) that may never generate any income at all (and hasn't, as the OP never used it).  The two concepts - overdraft v loan - aren't equals. 

Gimcrack

Just been through same today and can empathise with the OP (who has got far too much & borderline nasty flack IMHO) - so I got a legacy £2.5 k o/d facility which I haven't used for over a decade and would have been quite happy to agree to cancel it had they called or written to me in this vein, however the tone of the letter rankled with me somewhat - particularly the statement in para 1 that were I to apply for same today they wouldn't give it to me under their prevailing criteria ...hmmm I needed to know more!

I called Premier banking to ask not why they had given notice to remove the o/d but why they wouldn't consider me credit-worthy for same and it's all about their definition of "income" - seems they have noticed I no longer have a monthly salary being paid in (ironically from Barclays as I worked for them for 30 years!) and have been moving lumps of money in to our CA from various sources since I finished my gardening leave in April. Unfortunately moving this doesn't count as income - and option to conduct variable drawdown (which I haven't yet needed to start doing) and decent sums on deposit doesn't count either when it comes to "ability to pay".

So, having provided feedback re the unilateral and some might say, slightly provocative manner in which this is all being communicated, I was more concerned about how flexible drawdown and ad-hoc movement of funds in and out of the CA generally adversely impacts my creditworthiness in their eyes - they really need to look at this in the round as these regimes are the norm for todays retiring generation since we were all binned-off (or never allowed to join in my case) copper-bottomed stress-free final salary schemes that would fit with their income definition.

There was one last sting in the tail as well, as after going through all of the above I said, "well at least I've got the couple of hundred quid fee free o/d with the Premier account", which is useful if this old duffer forgets to move the lumps around quickly enough or doesn't anticipate a splurging wife at the middle lane of Lidl - in true Christmas panto spirit "oh no you haven't" - thats gone too apparently although the agent offered the option to raise an appeal where the lending team will assess the request, but she followed that with a "but you won't get it as you have no income" and whats more any transactions that would put me even a pound overdrawn will be rejected - could be embarrassing down the Feathers with no cash !!! 

So in order to remain calm and sensible about this I am taking it all as a salutary lesson to get my financial !!!!!! in order (!) but my view remains that they could have done this in a much more customer-friendly manner, and kept anxious recent retirees still 4 years from a state pension onside (which would definately be counted as income by Barclays if it's still a thing !)

Over and out.....

eskbanker

Gimcrack said:

I got a legacy £2.5 k o/d facility which I haven't used for over a decade and would have been quite happy to agree to cancel it had they called or written to me in this vein

[...]

the unilateral and some might say, slightly provocative manner in which this is all being communicated

[...]

my view remains that they could have done this in a much more customer-friendly manner

I haven't gone back through the whole thread but think that the point was already made previously that overdraft provision is indeed unilateral, and they aren't obliged in any way to seek your agreement to terminate it.

It's up to you to perceive it as provocative for them to highlight that you no longer fit their lending criteria but they're presumably doing so in order to dissuade you from wasting your time and theirs by trying again?