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Spend & Save

Warning over cheques during bank holidays

Consumers were warned today that cheques could take up to two weeks to clear because of the high number of bank holidays occurring as a result of Easter and the royal wedding.

The Payments Council said there were only five working days between April 20 and May 2, meaning that a cheque that was paid into an account on Wednesday April 20 may not have fully cleared until Wednesday May 4.

Cheques show up in people's current accounts two working days after they are paid in, but the money cannot usually be withdrawn until after four working days, while there is no guarantee that a cheque will not bounce until six working days have passed.

The group also urged people to check the time scales for paying important bills over the coming days to ensure that they were not stung with penalty charges as a result of delays caused by the bank holidays.

It advised people who usually paid bills by sending a cheque through the post to consider using the faster payments system instead, as the postal system was likely to be slower than usual because of the high number of bank holidays.

Under the faster payments system, payments generally clear on the same day that they are made, regardless of whether it is a Sunday, bank holiday or if the payment was made outside of banking hours.

But the Payments Council sought to reassure consumers that bills paid by direct debit would not be impacted by the low number of working days.

Although direct debits are not processed on bank holidays, money is taken from people's accounts on the nearest day to when the bill is due to ensure it is never paid late.

Gary Hocking, acting chief executive of the Payments Council, said: "It is unusual to get so many bank holidays in such a short space of time so it makes sense to think about what bills and invoices you might be due to pay in the next two weeks - and to consider if you have to make alternative arrangements for any of them.

"With a wider range of payment options available to us than ever before, taking five minutes to check up on your ways to pay can help you make sure that you aren't affected."