Bank has taken my UC payment!

[Fedupandpoor]

I'm completely fucked. I bank with Tesco and have had a £1000 overdraft for about a year. I'm always overdrawn and am working to crawl out of it. UC paid my monthly payment in today, it was a slightly higher one if £1020 so took me out of overdraft. Within 1 hour fucking Tesco cancelled my overdraft so I have £20. £20 fucking pounds for the month. I have 2 dc and have no food, no rent money no pack lunch, no gas electric, fuck! Do I have any protection from this at all? I'm on the bus home now and will call them as soon as I get home I'm shy to do it on the bus, will they put it back? Absolute fuckers!

Glad you’re Ok Op x

If you can try and chip away at the overdraft every month even by a small amount to try and bring it down though that might help

That panic is definitely a horrible physical pain, I know it well. Good luck op, you'll get there

Just seen your update, glad it's all ok!

I have my UC paid into my savings account. Maybe something to consider for future payments

Fedup I think I held my breath until I read the entire thread then! I’ve been in a very similar position one November and my head was rolling off!!

I’m beyond glad it’s still there!

Hi everyone, thank you for all the kind comments.

I've just opened a metrobank current account and will have my UC switched over to that. I'll never apply for an overdraft on that one! (not that I'd get it).

I'm reading every comment and taking it in. I hate hate hate being in debt. But it's difficult to crawl out of when a UC payment barely covers the essentials. I'll get there though. to everyone going through similar, onwards and upwards!

Well done op for taking first step. Even if you can transfer £5 a month to your tesco account - it shows you are paying it off. Also try having a chat with them about freezing the interest on the overdraft

I'm glad it's all sorted OP. Some of us are only a P45 away from disaster and anyone can have a financial hiccup in their life. Good idea opening another account and paying the overdraft off bit by bit. You might consider a low % credit card for dire emergencies.

That's great news Op.

Would you consider some of the suggestions upthread before your update.
I know Stepchange & Christians against poverty are great places to get advice to get out of debt, I am worried you are going to get stung by Tesco's bank when the new over-draft charges come in.

Would it be worth seeing if you qualify for a food bank parcel, or a council grant, and then use the money you save to start paying down the over-draft?

We all know that unexpected expenses pop up when we least need them, if you can pay off that over-draft, or get a sensible payment plan, with no interest or charges (ask the charities I've mentioned for help asking the bank for this) that will give you peace of mind and a bit more financial resilience for the future?

This could end up being a good wake-up call....although I am sure you could have done without the stress!

This is awful - I had no idea this could happen. I always assumed that because banks make money out of overdrafts (mine charges £6 a month plus interest) they would have no reason to do this. I use mine every month.

This. I've never heard of an overdraft facility being cancelled (I'm not in the UK).

I've read your update OP, and am so pleased that it was just a misunderstanding.

You can get it back yes. They are not allowed to use benefits to pay your overdraft as the government say you need a minimum level to live on. You will then incur charges for being in unplanned overdraft though which can be expected and is more difficult to get back, speak to the citizens advice

I’m so sorry app, sound horrific. They don’t have to give you notice to cancel. Can you apply for an advance from UC?

So angry with izzywizzy ... have you not heard the phrase ' there but for the grace of God go I ' ? I was in a really comfortable situation, my husband left, I was on benefits and using the food bank .. 2 years later am struggling to look after myself and my son, no one knows what life will deal them and no one can be in judgement of another ... xx

Thank god op

Well done on leaving the ex. The bank did it to me when I left my awful ex and it was actually his overdraft they took my money to pay (linked via the joint account). I am so pleased it’s a false alarm, still bloody scary when it happens.
It may be worth speaking to step change / payplan / CAB and see if you can get the interest frozen on the overdraft. Otherwise it may rack up with interest and small payments.

You may find something like a credit union works out cheaper to pay back over a long period then the Tesco overdraft.

Oh OP I’m so glad it got sorted. I read your first post with my heart in my stomach. I’ve been in similar circumstances and it’s horrible to be confronted with the reality of how quickly the wheels can come off.

I’ve not used Stepchange myself but I know a few people it’s really helped. Do get in touch with them and see what they could do to help you.

It will get better I promise. Keep your chin up .

Banks can't take benefits to repay debts.

They will need to give you the money back.

I'd also suggest you open an account elsewhere and ask to set up a payment arrangement for the money you owe.

Make a complaint and quote this:

Social Security Administration Act 1992
Miscellaneous
Certain benefit to be inalienable **

187- Subject to the provisions of this Act, every assignment of, or charge on-
(a)benefit as defined in section 122 of the Contributions and Benefits Act;
(b)any income-related benefit; or
(c)child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bancrupcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

Just read your update OP. Glad you're sorted and have opened an account elsewhere.

Fedupandpoor Bet you could do with a stiff drink:)

We've heard some very good thimgs about this bank, cheap to run no branches, who needs them?, and a call centre thats on the go 24/7!

www.starlingbank.com/

Don't forget you can visit citizens advice to help you get out of debt. Even if it's just advice on where to start. It can feel like you don't know where to turn but there are places that will guide you through it to keep your head above the water

Just read your update. What a relief. So glad for you.

Bless you. I've been there and I had that horrible feeling when your stomach drops just reading about it.

I'm so glad you have it sorted now.

Op I work in a bank. Please be careful with having your uc paid into a different bank. As if Tesco isn't your main bank anymore they could really cancel your overdraft (especially if you have already had that before)

But then they demand full payment. And I know where I work if full payment isn't available it goes to collections. Which is so damaging for your credit score.

Most banks have financial guidance if you ring them they will normally make a plan with you. It's always best to see what they can offer before you go to collections. As once in collections there is normally nothing the bank staff can do to help.

And when you out of all this maybe look for a high street bank so that if this happens again at least you can go talk to a real person

So glad you have this sorted.

For future refference, there are a few emergency funds and payment advance schemes available. Nothing is guaranteed but you're not abusing the system to ask, sometimes things are just tough. A bit of luck is needed to turn the corner, but turn the corner you can. I remember being at the supermarket having to make the call between baby milk and nappies when my card was rejected and I only had about £3 cash. It was a real chicken and egg headache. My corner turned.

Universal credit emergency costs budgeting advance this is one of the schemes that may be relevant. It may still be relevant as an alternative option, if you wanted to have a more formal payment plan for clearing that overdraft.

I was in a similar situation years ago.
Best advice I was given was to open a new no frills bank account with no overdraft or perks and get all my income paid into it. Then arrange to pay off your overdraft at an affordable amount. It takes away the worry of them cancelling your overdraft and leaving you with nothing while you try and sort it out.

Good luck, OP. The childcare trap is real and so,so hard when you are starting from scratch. My only practical advice is not to mentally limit yourself to school hours - work out what you would need to buy in wrap-around care and then aim higher. There is typically more career advancement in that scenario and a better chance of digging yourself out of UC. You can budget for school holidays by stashing away the amount you need across the year: childcare vouchers/accounts allow you to do that.