Some of the UK’s largest banks have been hit by IT issues, causing chaos on a key date for business payroll. It’s the last day of the month, or for many UK workers, pay day.
Nationwide, First Direct, Lloyds and Halifax all confirmed problems with their online banking systems this morning. The error caused payment delays and left thousands of employees unable to view their wages and settle outstanding bills.
As those affected flocked to social media to complain, one user reported they have been unable to access their business bank account to pay their employees.
Lloyds Bank has said the issue is now resolved. But this is the second month in a row that bank accounts have been hit by glitches around pay day, causing concerns among bosses that financial mayhem might soon be a regular guest in their staff’s monthly payslips.
“Another month end, another collapse of the banking system,” said Keith Budden, Managing Director at Ensurety. “This is starting to be more than just an annoying niggle, it’s now a payments pothole that needs fixing.”
Pay day app glitch sparks alarm
Over 4,000 technical issues with the Lloyds Bank app were reported on Friday morning, according to the online incident tracker, Downdetector.
The BBC also reported that Halifax, TSB, and Bank of Scotland customers were affected, leaving them unable to settle bills, transfer money, or check their balance to budget for the weekend.
Pay day is probably the busiest period for payroll teams and banks alike. Millions of pounds are paid out in one day. Systems can struggle with the high rate of activity as wages and bills go in and out of savings and current accounts, causing errors.
When the issue last occurred in January, many banks blamed the outage on their shared Faster Payments system, which allows real-time transactions to be made. But one expert says the issue is occurring too frequently to be dismissed as a one-time IT accident.
“This isn’t isolated; recent glitches such as Barclays hint at UK banking fragility,” says Tony Redondo, founder at Cosmos Currency Exchange.
“It’s a strained system—banks must rethink capacity, not just react. Until then, we’re all just crossing our fingers that the app loads next time pay day rolls around.”
What can small business owners do?
Bosses who find themselves unable to pay staff should immediately contact the workforce on an established communication channel, such as email or Slack. Payroll managers should relay what happened and update teams on the fix.
That should certainly be the case for those who’ve been unable to send payments. But it’s also a smart idea if your staff are simply unable to view their wages.
Kate Underwood is Managing Director at Kate Underwood HR and Training. Underwood says that reaching out to workers and suppliers should be your first move.
“When pay day glitches hit, it’s your chance to step up as a small business. Check in with your team to see if anyone’s feeling the pinch and offer support if you can”, says Underwood.
Offering an explanation for the delay, even if it’s not your fault, can help to alleviate any worries that workers may have that their payslip may not have been issued. They may also have financial concerns about being able to make bill payments on time.
“Being open about any delays and sharing regular updates shows your team you’ve got their back, and that kind of transparency builds trust like nothing else”, adds Underwood.
How to futureproof against pay day delays
Short of changing bank accounts, business or personal, there are a couple of options for employers to fortify their payroll against future disruption.
One option is to change payment schedules. Some companies pay their employees a few days before month-end to avoid the uplift in activity.
However, this solution comes with added steps. You may need to report the change via a Full-Payment Submission to HMRC. Businesses must also ensure the new schedule complies with employment contracts and legal requirements.
If you’re still manually logging in to a business account to send money to workers on pay day, your payroll run will also remain at the mercy of your bank’s infrastructure. The smart choice is to install payroll software to automate your wage processing.
As a final precaution, make sure you have a backup payment account. This provides a separate place to hold funds, useful for segregating finances or as a contingency in the event of an outage.
“Individuals and small business owners should have at least one other account to be able to make and receive payments, preferably with some kind of offline, telephone or branch-based facility,” Faisal Sheikh, Managing Director at Monmouth Capital.
