Reduced mortgage offer due to pension salary sacrifice

kingstreet

Some lenders take pension conts into account in calculating mortgage affordability, some don't.

The salary sacrifice is a red-herring.

New lender required.

Brightspark87

Hi I deal with sal sac all the time - who is she dealing with>? I suggest an independent broker rather than a bank directly as they know where to pitch this.

Sal sac shouldn't matter as the mortgage is based on your net pay anyhow so being a member of the pension scheme shouldnt affect her mortgage or none of us would join!


Sal sac doesn't ever show on payslips, its entered into to reduce salary paid and save NI - if it was shown on payslips she'd have to pay tax on it.

glennevis

When I joined the firm's salary sacrifice scheme I was specifically warned that the salary reduction would affect the maximum size of any mortgage and for that reason it was not necessarily the best option for all employees.

Shakin_Steve

Her salary is £121000 and she is borrowing £108000? Less than her annual salary?

Calcus

Sorry you are missing the point here. I know her salary has gone down. My point is that if her company had taken her pension out of her gross salary then they would be happy. So it is not about deposible income here. It is simply about how the pension is taken. And that seems ridiculous to me. If she had known that the salary sacrifice way would result in this she could have asked for it to be taken via her wages. This way it would be on her pay slip and her mortgage offer would not have changed.

Brightspark87

Calcus wrote: »

Sorry you are missing the point here. I know her salary has gone down. My point is that if her company had taken her pension out of her gross salary then they would be happy. So it is not about deposible income here. It is simply about how the pension is taken. And that seems ridiculous to me. If she had known that the salary sacrifice way would result in this she could have asked for it to be taken via her wages. This way it would be on her pay slip and her mortgage offer would not have changed.

Hi

This a) is against FCA regulations and b) covered in my earlier post.

They cannot penalise you for saving into a pension. If this provider does find one that is more sensible!

Calcus

Brightspark87 wrote: »

Hi

This a) is against FCA regulations and b) covered in my earlier post.

They cannot penalise you for saving into a pension. If this provider does find one that is more sensible!

Thank you for your answer. We were dealing through a broker so I contacted the building society directly. After 2 days of trying to get to the right person we have managed to persuade the underwriter to accept a proof based on documents from the pension provider and HMRC. So you gave the correct answer. This is the first time I have contacted a forum and it shows some people are more than eager to give advice not based on fact.
So to finish off (for anyone who finds themselves in the same position) challenge the building society/broker and as long as you can prove your salary has gone due to pension contributions you may well be OK

marksoton

kingstreet wrote: »

Some lenders take pension conts into account in calculating mortgage affordability, some don't.

The salary sacrifice is a red-herring.

New lender required.

Calcus wrote: »

Thank you for your answer. We were dealing through a broker so I contacted the building society directly. After 2 days of trying to get to the right person we have managed to persuade the underwriter to accept a proof based on documents from the pension provider and HMRC. So you gave the correct answer. This is the first time I have contacted a forum and it shows some people are more than eager to give advice not based on fact.
So to finish off (for anyone who finds themselves in the same position) challenge the building society/broker and as long as you can prove your salary has gone due to pension contributions you may well be OK

I think that's unfair. You got your answer with the post above.