Nationwide and Childcare Vouchers

cae.dev

I'm in the process of moving home and would really like to port my existing Nationwide mortgage (currently 2.5%) and borrow extra to make up the value of our new house. We're running into problems with borrowing enough because of the way they appear to treat childcare vouchers. Essentially, my wife and I each use our full £243 allowance which is paid out of gross salary and this covers our childcare completely. Because the £243 comes out of the gross the actual effect on net salary is approximately £143.

If we go through the affordability calculator with £243 x 2 as the childcare cost Nationwide won't lend us enough, but with £143 x 2 (the actual cost in take home salary) we're able to borrow enough.

When I spoke to a representative in branch he said we needed to enter the full £243 as a deduction from net but I wanted to check whether anyone can confirm this is correct? It seems wrong that they are effectively using the incorrect figure in their calculations.

df4280

Hurrah! It's not just me. We are in an almost identical situation!

We want to port mortgage (2.5%) and take additional borrowing. I completely agree with your logic. The only slight difference is that if we enter our salaries having already reduced our salary (i.e. how it is in reeality) in their online calculator and put zero in the deductions section, they will lend what we need.

However, I have had the same guidance to enter 243 (a gross deduction) into their deductions section which clearly is for net deductions. This severely reduced the amount we can borrow.

I have asked for a manager (via my online account) to review my arguement as I feel my message is being dealt with someone who does not understand the logic of what I am saying.

A couple spending £486 of their net income is clearly worse off than a couple sacrificing £486 of their gross income and reaping the benefits of savings on tax and NI.

Have you had a response from Nationwide since?

Moby_Tide

It's a mockery really. Luckily didn't affect us as we were well within limits but I was forced to double count my wife's vouchers (all £20 of them) for the same reason because they appeared on her payslip when they checked them.

Yet for some reason they completely ignored the £100+ sacrifice on mine.

Once past that hurdle we still had an argument over mortgage statements vs bank statements showing payments to contend with but eventually got an offer after speaking to them. They really need to sort their policy out to make it clear though as it does make a difference evidently

Thrugelmir

cae.dev wrote: »

If we go through the affordability calculator with £243 x 2 as the childcare cost Nationwide won't lend us enough, but with £143 x 2 (the actual cost in take home salary) we're able to borrow enough.

The outcome may depend on how far you are pushing affordability. As online calculators are only guides, i.e. not definative.

Dave_Ham

Whilst I understand the logic, I am unsure if Nationwide will change their stance on this.

When using Nationwide, we have a note to always check childcare vouchers/student loans and then check again as they do seem to affect them heavily.

I doubt your complaint will be resolved to what you want/need, is there any other income either of you can use to push over the line?


All the best

kingstreet

Nationwide deducts the cost of childcare if you don't have the vouchers, so unless I'm going mad, it makes no difference.

You either lose it from your income, or it comes off later as an expense, like loans, card balances, maintenance etc.

Moby_Tide

kingstreet wrote: »

Nationwide deducts the cost of childcare if you don't have the vouchers, so unless I'm going mad, it makes no difference.

You either lose it from your income, or it comes off later as an expense, like loans, card balances, maintenance etc.

Your payslip shows your net income after sacrificing salary for childcare vouchers whilst you also have to declare childcare costs as an outgoing (even though it's paid for via vouchers rather than your net cash). Depends if they use your declared income/salary or what your payslip says you take home.

kingstreet

Nationwide doesn't double charge you for the same thing.

If you pay £400 a month in childcare, it deducts £400 per month from affordability.

If your gross income is reduced by £243 per month for childcare vouchers, it it only deducts £157 for the childcare.

The end result is the same. We had a case just like this recently.

df4280

Kingstreet the issue is they won't seem to allow me to reduce my salary (a gross deduction) by the £243 (2916 per annum). They want me to put 2916 as a net deduction.

It makes a big difference............

df4280

kingstreet wrote: »

Nationwide deducts the cost of childcare if you don't have the vouchers, so unless I'm going mad, it makes no difference.

You either lose it from your income, or it comes off later as an expense, like loans, card balances, maintenance etc.

Hi I just re-read what you posted. So do you have experience of Nationwide accpeting people reducing their salary (if in receipt of vouchers)? At the moment the people I am talking with are not allowing this concept.

kingstreet

Ask your broker to clarify the issue.

On our case, Nationwide called and asked if the amount of the vouchers was the extent of the childcare cost, it was and we confirmed that.

I don't have a policy manual or criteria entry for you to quote from or anything like that.