State pension as 'allowed income'

Charlton_King

Following up on a previous thread of mine about mortgages in retirement, I'd like to have a clearer understanding about whether the state retirement pension is considered by lenders as a valid income stream.

Throughout my calculations, I've assumed this to be so but would like confirmation.

HappyMJ

It is a valid income stream but you also need to live so when a mortgage provider does an affordability calculation they won't agree that you might say you only spend £20 a week on your bills they will use averages and those averages might equal whatever state pension you get and you have no spare income to pay a mortgage. If you had private pension income and some other investment income then using state pension to pay your living costs could make a difference when calculating whether you can afford the repayments going into retirement.

Charlton_King

Yes, our private pensions will also be kicking in but the state pension, whilst much derided, is still fairly handy to have. I was just checking that lenders will allow it into consideration along with other sources.