What is a standing order?

Key takeaways

• A standing order is an automated payment method set up between you (the customer) and your bank

• Standing orders allow you to set up regular payments without manual effort, but they must remain the same each time, which may not suit bills with varying amounts

• Typically, your bank will prevent a standing order payment from going out if there isn’t enough money in your account to cover it

• If a standing order falls on a non-working day, the payment will be delayed until the next working day

What is a standing order?

A standing order is a type of bank transfer that lets you pay a set amount of money on a set date.

It can be money you want to send to another person, a bill or other regular payment you need to pay, or a convenient way to move money between your own bank accounts.

Standing orders are set to repeat – so you can transfer the same amount of money each month or each week, for example.

It ends after a chosen date, or after a certain number of payments have been made, or it can keep rolling until you manually stop it – it’s up to you.

Standing orders are often used for things like:

• Paying regular bills such as your rent or mortgage

• Moving money between your different accounts (e.g. from a current account to a savings account)

• Sending money to family members on a regular basis

• Making charity donations

• Paying regular fees to cleaners or dog walkers

Standing orders vs direct debit

The main difference between a standing order and a direct debit is that you set up a standing order yourself, whereas a regular direct debit is set up by the company you’re paying the money to. You’re in total control of a standing order, and can change or stop it at any time.

A standing order is always a set amount each time, and goes out on the date you want it to. A direct debit, on the other hand, may change or may be a different amount each month.

That means standing orders are often best for payments that will always be the same, such as rent or your kids’ pocket money – while direct debits are ideal for payments that can vary month to month, such as your energy bill.

What are the benefits of a standing order?

Pros

• Manage your finances: Standing orders let you take control by automatically moving money where you need it

• Convenient: Setting up a standing order for a regular payment means you don’t need to remember to manually do it

• Under your control: Unlike a direct debit, you’re in full control of the amount and the date it goes out

• Flexible: They’re easy to cancel or change, especially if you use a mobile banking app – and can be made to any type of account, whether business or personal

Cons

• Must be a set amount: Unlike a direct debit, standing orders must be the same amount every time – which can create issues for bills or payments that may change

• Need to be cancelled: When you no longer need the standing order, you’ll need to remember to cancel it – or the payment will go out anyway

How do I set up a standing order?

You can set up a standing order directly with your bank. Most let you do so via online banking or their mobile app, though you can also set it up over the phone or in person at a branch.

You may be able to find standing orders under a section called ‘payments’ in the app or online portal.

All you’ll need is the sort code and account number of the account you want to pay the money to. The recipient may also ask you to add a certain reference code, so that they can find the payment easily on their statement.

How do I change or cancel a standing order I previously set up?

You can change or cancel a standing order in any of the same ways you set it up: via online banking, in the mobile app, over the phone, or at a branch in person.

Check with your bank first – it may have specific instructions for how to change or cancel the payments.

Bear in mind, too, that cancelling a standing order doesn’t cancel any contracts you may have with the payee. You may still owe them money.

What happens to standing orders if I switch bank accounts?

Thanks to the Current Account Switch Guarantee, any regular payment systems you’ve set up will be transferred automatically to your new account when you switch – and that includes standing orders.

There’s nothing specific you need to do. Just switch your account, and the bank will deal with the rest.

What happens if I don’t have enough money in my account for a standing order?

Usually, your bank will stop the payment from going out. They may contact you to let you know you didn’t have enough in the account to cover the standing order (often by text or email).

This gives you a chance to get money into your account and re-try the payment. So you may not need to worry about slipping into your overdraft.

However, it’s a good idea to check what the protocol is for your bank and your type of account, as this can vary between banks.

Can you pay standing orders at the weekend?

No. Standing orders only go out on working days, meaning payments generally won’t go through at weekends and on bank holidays. The payment will be delayed to the next working day.

It’s also worth bearing in mind that any type of payments, including standing orders, can take up to five days to fully clear and for the money to appear in the account you’re sending to. They aren’t always instant.