Dependents death benefit pension

Emmalips

Hi there,

I will try to keep this as brief as possible so you get the overall picture of my current situation.

In a nutshell, my partner died when our daughter was 2 months old. We weren't married and were not currently living together for various reasons. He had a pension with his company and the trustees decided that there would be a lump sum paid into a trust for my daughter plus a death benefit paid out monthly until she reaches 23. At the time I was advised to open a joint bank account with my daughter who is now 5 so that I would be be able to access the funds as her surviving parent but the payslips from the pensioners payroll would be in her name.

I recently took a cut in salary so that I could work around school hours which was fine as the pension income enables me to do this. I recently decided that we should move house so I phoned my lender for an agreement in principle and was told that the pension could count as income as it was paid regularly into my bank account despite being in her name (I made this perfectly clear).

However, after receiving an offer on my property and having an offer accepted on a purchase I tried to arrange my new mortgage which was simply a transfer of the existing amount and £117k cash deposit from the equity and was told right at the beginning of the call that they could not accept the pension as income and that I wouldn't meet the lending criteria on my current salary.

As you can imagine, I am devastated. I have put my heart and soul into this move after getting not one, but two AIP from my lender based on these facts only to now face the prospect of pulling out of the entire deal. My question is, why can't this be classified as income if I have 100% access to it? If they will accept child maintenance as income, the only difference I can see here is a payslip.

All feedback welcome.

kingstreet

Speak to an independent broker who can establish if there are lenders who will accept this income for you.

Any time you move house, it's a new mortgage as the old one is repaid, so new affordability and criteria checks are done to establish if the application can proceed. This is more onerous since the MMR in April 2014.

I'm sorry to be blunt, but you really can't trust call centre staff and many brokers have a saying, "call a lender three times and you'll get three different answers" and that's why we would get in writing what and underwriter is prepared to accept in advance of advising a client to do anything...

Emmalips

Hi there.

Thanks for response. I have put in a call to a broker who is going to chase this up tomorrow and even if it transpires that I can't use the income then I will try to increase the multiple a bit.

Yes, you are right, I should have done that before starting this whole process. I don't understand the point of an AIP to be honest. In the grand scheme of things you could pretty much tell the lender anything and they'll issue one. Very disappointing

kingstreet

An AIP is subject to the input data being verifiable at full application. No lender has a system sophisticated enough to pick up this issue. The information you were given over the phone was incorrect and that has caused the problem.

Emmalips

The surprising thing is that the lady went away and spoke to someone else (can't remember who it was she spoke to) to check that I could use it and she came back all jolly and eager with the words "based on the facts that you've provided we can lend you this amount, and a lot more if needed". However the advisor I spoke to yesterday said he had to check with the underwriters and wouldn't be able to get back to me until Thursday. Not sure why I have to wait that long but hopefully, in the meantime I will have either found an alternative lender or rejigged my figures a bit and perhaps put my cash savings into it with a view to replenishing as soon as.

I think it's one of those situations that not documented anywhere as it's not that usual so there probably aren't any set rules. I have googled this to death and found nothing similar hence bringing me here in the hope somebody has experienced a similar situation. Difficult one.