What counts as income for students?

Lloyds_Bank

jonesMUFCforever wrote: »

Yes I am saying that a student applying for a Lloyds student credit card will only be accepted for a student credit card if they are employed in addition to their studies,with the salary mandated.
Huge investments or parental contributions do not count.


I have not seen the Lloyds bank rep on here for ages so can't ask him/her why this is.

Hi jonesMUFCforever,

Due to sustainability, we don't allow student loans/grants and parental contributions (or other income sources where there is no binding agreement in place) as sources of income for a credit card application. A credit card is a long term lending product and such payments may not be received throughout the life of the account.

In practice, this means one of our Student Account customers applying for the Student Credit Card will need to have some form of employment in order to be eligible for the card. We believe this is the right thing to do for our customers as it ensures they can afford the card for the foreseeable future.

Thanks,

Craig

jonesMUFCforever

Don't tell me I already know tell the others on here.

Archi_Bald

Lloyds_Bank wrote: »

Hi jonesMUFCforever,

Due to sustainability, we don't allow student loans/grants and parental contributions (or other income sources where there is no binding agreement in place) as sources of income for a credit card application. A credit card is a long term lending product and such payments may not be received throughout the life of the account.

In practice, this means one of our Student Account customers applying for the Student Credit Card will need to have some form of employment in order to be eligible for the card. We believe this is the right thing to do for our customers as it ensures they can afford the card for the foreseeable future.

Thanks,

Craig

Are you going to take the card away if the employment ends? How do you know that employment might last longer than parental contribution?

thebritishbloke

Lloyds_Bank wrote: »

Hi jonesMUFCforever,

Due to sustainability, we don't allow student loans/grants and parental contributions (or other income sources where there is no binding agreement in place) as sources of income for a credit card application. A credit card is a long term lending product and such payments may not be received throughout the life of the account.

In practice, this means one of our Student Account customers applying for the Student Credit Card will need to have some form of employment in order to be eligible for the card. We believe this is the right thing to do for our customers as it ensures they can afford the card for the foreseeable future.

Thanks,

Craig

Archi_Bald wrote: »

Are you going to take the card away if the employment ends? How do you know that employment might last longer than parental contribution?

I'd say someone in employment is getting even more volatile and less regular payments than someone just starting in university. If someone is just starting university, they're almost guaranteed to get payments every 3 months for the next 3+ years. The employed person could be sacked the next day (A student could drop out, but I'm sure the ratio of people losing their jobs to dropout students is lower)

Lloyds_Bank

Archi_Bald wrote: »

Are you going to take the card away if the employment ends? How do you know that employment might last longer than parental contribution?

Hi Archi Bald,

We do ask sustainability questions during the application to ensure that our customers can manage the credit card facility, but do not actively check ongoing income. Ideally, our customers would contact us if they were no longer in employment to determine the best way to manage their credit card account. If not informed, account management, pre-collections and collections processes are designed to support the customer and manage limit and payments inline with their situation.

Thanks,

Craig

Lloyds_Bank

thebritishbloke wrote: »

I'd say someone in employment is getting even more volatile and less regular payments than someone just starting in university. If someone is just starting university, they're almost guaranteed to get payments every 3 months for the next 3+ years. The employed person could be sacked the next day (A student could drop out, but I'm sure the ratio of people losing their jobs to dropout students is lower)

Hi thebritishbloke,

As I'm sure you'll be aware, no form of income is completely guaranteed. However, the certainty of contractual salaries is significantly greater than any other form of income and is supported by data.

Thanks,

Craig

jamesd

Lloyds_Bank wrote: »

As I'm sure you'll be aware, no form of income is completely guaranteed. However, the certainty of contractual salaries is significantly greater than any other form of income and is supported by data.

It's going beyond the student context but is it the belief of Lloyds Bank that contractual salaries are a more reliable source of income than:

1. the state pensions
2. lifetime annuities
3. investments in gilts, bonds issued by the British government
4. investments in corporate bonds issued by Lloyds Bank
5. investments in general

For example, which of these would Lloyds Bank consider to be more reliable for a long term product:

A. A 65 year old person with a contractually salary of £25,000.
B. A 65 year old person with £11,000 in state pensions, £5,000 in annuity and £9,000 being drawn as income from £225,000 of investments that were accumulated from earlier income.

C. A 50 year old person with contractual salary of £25,000.
D. A 50 year old person with £25,000 of income from £625,000 of investments that were accumulated from earlier income.

The incomes in B and D are the generally accepted as reliable lifetime income levels from the value of investments given as producing that income - 4% of the initial capital increasing with inflation for life.

If there's any public data available on this I'd be interested in pointers to it.

Part of the reason I'm asking is that at some point I expect to be in a position similar to D due to deliberate early retirement and want to know if I should expect that Lloyds would choose to assume that I have no income at all until I reach state pension age. But mostly I'm asking to learn more about the subject and am really interested in data on income reliability!

TartanSaver

Lloyds_Bank wrote: »

As I'm sure you'll be aware, no form of income is completely guaranteed. However, the certainty of contractual salaries is significantly greater than any other form of income and is supported by data.

So student finance, which essentially comes from the government, and is agreed in advance, is less reliable than part time work with no job security? "Contractual" salaries can be ended at any time up to 2 years, with no legal recourse for employees. A significant majority of working students will not have been in their jobs for 2 years. A lot of students will be on zero hours "contracts". Students have no recourse to benefits.

Also, you apply this logic to student grants, which are entirely free, and also agreed in advance. They can be easily evidenced in the form of documentation from the awarding agency. This seems quite illogical.

jamesd

TartanSaver wrote: »

So student finance, which essentially comes from the government, and is agreed in advance, is less reliable than part time work with no job security?

That appears to be because it's considered to be long term borrowing and normal student grants or loans are not generally a long term source of income. So it's not so much the income today but the expectation of income five years from now that is being considered. The assumption seems to be that a person who can do a job will be able to find more work at similar pay levels in the future and given general employment levels that tends to be a true expectation. That wouldn't normally be true of standard student loans and undergraduate grants that by their nature have strictly limited payment periods.

Lloyds_Bank

jamesd wrote: »

It's going beyond the student context but is it the belief of Lloyds Bank that contractual salaries are a more reliable source of income than:

1. the state pensions
2. lifetime annuities
3. investments in gilts, bonds issued by the British government
4. investments in corporate bonds issued by Lloyds Bank
5. investments in general

For example, which of these would Lloyds Bank consider to be more reliable for a long term product:

A. A 65 year old person with a contractually salary of £25,000.
B. A 65 year old person with £11,000 in state pensions, £5,000 in annuity and £9,000 being drawn as income from £225,000 of investments that were accumulated from earlier income.

C. A 50 year old person with contractual salary of £25,000.
D. A 50 year old person with £25,000 of income from £625,000 of investments that were accumulated from earlier income.

The incomes in B and D are the generally accepted as reliable lifetime income levels from the value of investments given as producing that income - 4% of the initial capital increasing with inflation for life.

If there's any public data available on this I'd be interested in pointers to it.

Part of the reason I'm asking is that at some point I expect to be in a position similar to D due to deliberate early retirement and want to know if I should expect that Lloyds would choose to assume that I have no income at all until I reach state pension age. But mostly I'm asking to learn more about the subject and am really interested in data on income reliability!

Hi jamesd,

Investment income (including dividends) and pensions are both allowable as income on credit card applications with us.

Thanks,

Craig