Retired with no income

lr1277

ratechaser said:

lisyloo said:

ratechaser said:

lisyloo said:

Deleted_User said:

phillw said:

Deleted_User said:
I have never had to provide proof of income for a card,

I think they mostly validate it against what you said your income was the last time you applied.

If you start putting £0 for income on credit applications, then I can imagine that the computer system flags that up and they will want further details.

Sure but OP is being asked to provide proof of income so doubt he has put 0 as they'd just refuse the application, more likely has put income from savings or whatever and that is what the bank want proof of.

Why is it not possible to provide proof of savings income?

Because you could go and blow it all at the casino rather than have a steady monthly stream...

I do however think that the industry may need to adopt a more flexible approach going forward - historically you'd either have earned income or an annuity/state pension at retirement. Now however people are doing drawdown and other less 'fixed incomey' type things with their money when they retire. I will probably be one of them. 

So while I'll probably make sure I'm set up with all the income dependant financial products I want just before I retire, I don't want to be hamstrung later down the line just because I have large assets but no traditional regular/fixed income stream.

One answer is to get the good cards before you retire (yes I know it's potentially a long time).

Another answer (not very sympathetic one I'm afraid) is that CC companies are at liberty to choose their target market. They don't have to be flexible if that's not their target market.

Of course they can choose, and given how I milk my chosen financial service providers, it never ceases to amaze me that they still want me. Luckily a high salary seems to be enough of a carrot to them that maybe they can sell me something in future. The poor deluded fools.

As I said, I will certainly do my utmost to have my ducks in a row just before I retire, given it might be my last shot... the only alternative would be to do something like dump a large large amount with someone like HSBC to manage and then they 'give' you their nice accounts and credit cards. Just don't look at the management charges...

At a slight tangent to this thread, I would suggest your retirement date might not be your choice. I involuntarily stopped working a few years ago, without thinking about this situation and found I was stuck with the cards I had at the time.

ratechaser

lr1277 said:

ratechaser said:

lisyloo said:

ratechaser said:

lisyloo said:

Deleted_User said:

phillw said:

Deleted_User said:
I have never had to provide proof of income for a card,

I think they mostly validate it against what you said your income was the last time you applied.

If you start putting £0 for income on credit applications, then I can imagine that the computer system flags that up and they will want further details.

Sure but OP is being asked to provide proof of income so doubt he has put 0 as they'd just refuse the application, more likely has put income from savings or whatever and that is what the bank want proof of.

Why is it not possible to provide proof of savings income?

Because you could go and blow it all at the casino rather than have a steady monthly stream...

I do however think that the industry may need to adopt a more flexible approach going forward - historically you'd either have earned income or an annuity/state pension at retirement. Now however people are doing drawdown and other less 'fixed incomey' type things with their money when they retire. I will probably be one of them. 

So while I'll probably make sure I'm set up with all the income dependant financial products I want just before I retire, I don't want to be hamstrung later down the line just because I have large assets but no traditional regular/fixed income stream.

One answer is to get the good cards before you retire (yes I know it's potentially a long time).

Another answer (not very sympathetic one I'm afraid) is that CC companies are at liberty to choose their target market. They don't have to be flexible if that's not their target market.

Of course they can choose, and given how I milk my chosen financial service providers, it never ceases to amaze me that they still want me. Luckily a high salary seems to be enough of a carrot to them that maybe they can sell me something in future. The poor deluded fools.

As I said, I will certainly do my utmost to have my ducks in a row just before I retire, given it might be my last shot... the only alternative would be to do something like dump a large large amount with someone like HSBC to manage and then they 'give' you their nice accounts and credit cards. Just don't look at the management charges...

At a slight tangent to this thread, I would suggest your retirement date might not be your choice. I involuntarily stopped working a few years ago, without thinking about this situation and found I was stuck with the cards I had at the time.

Oh agreed that there is some uncertainty and variability here. If had my choice, retirement would have been some time before yesterday. However Mrs RCs choice for me is several years from now. So I just have to keep my accounts constantly up to date and watch for the signs of impending freedom approaching!

Sandtree

lisyloo said:

Nebulous2 said:

lisyloo said:

Deleted_User said:

phillw said:

Deleted_User said:
I have never had to provide proof of income for a card,

I think they mostly validate it against what you said your income was the last time you applied.

If you start putting £0 for income on credit applications, then I can imagine that the computer system flags that up and they will want further details.

Sure but OP is being asked to provide proof of income so doubt he has put 0 as they'd just refuse the application, more likely has put income from savings or whatever and that is what the bank want proof of.

Why is it not possible to provide proof of savings income?

There is very little savings income at the moment. A lot of early retired people are drawing down their capital to live on until they are able to draw their pension. 

I currently have pretty much no income. I left work a month ago, my pension will take 2-3 months to resolve, I've done about 4 days part-time work in April and don't know what my hourly rate will be. 

Thankfully I don't need a credit card! 

I get that CC company might not want to approve, I just didn't get why there was an issue providing proof of savings income (which there shouldn't be if it's the truth).

I don't need a CC card either but there are benefits such as section 75, offers and cashback.

I also find it handy for budgeting e.g. not having to wait for savings to transfer.

I think the problem here is the word "income" and "earnings".


Scenario A - you have £300,000 invested as your savings, its making circa £20,000 in interest, dividends, capital gains etc... you therefore can declare and prove you've £20k income

Scenario B - you have £100,000 in a bank account at 0.5% interest so getting £500 a year interest however you declare a £20,000 income because you are drawing down the savings themselves. In this case your income is only £500, the rest is spending your capital and banks won't generally consider that for lending purposes as the pot won't last long/its unsustainable.

Nebulous2

lisyloo said:

Nebulous2 said:

lisyloo said:

Deleted_User said:

phillw said:

Deleted_User said:
I have never had to provide proof of income for a card,

I think they mostly validate it against what you said your income was the last time you applied.

If you start putting £0 for income on credit applications, then I can imagine that the computer system flags that up and they will want further details.

Sure but OP is being asked to provide proof of income so doubt he has put 0 as they'd just refuse the application, more likely has put income from savings or whatever and that is what the bank want proof of.

Why is it not possible to provide proof of savings income?

There is very little savings income at the moment. A lot of early retired people are drawing down their capital to live on until they are able to draw their pension. 

I currently have pretty much no income. I left work a month ago, my pension will take 2-3 months to resolve, I've done about 4 days part-time work in April and don't know what my hourly rate will be. 

Thankfully I don't need a credit card! 

I get that CC company might not want to approve, I just didn't get why there was an issue providing proof of savings income (which there shouldn't be if it's the truth).

I don't need a CC card either but there are benefits such as section 75, offers and cashback.

I also find it handy for budgeting e.g. not having to wait for savings to transfer.

Spending your savings isn't income. The only income you can declare is the interest from the savings - not the amount you draw. 


I'm afraid I didn't make myself very clear. I have 6 credit cards, with 4 of them having limits over £10k. 

I meant: 'Thankfully I don't need another credit card.' 

Thrugelmir

Deleted_User said:

Grumpy_chap said:

Deleted_User said:

I suspect OP means that they are being asked for proof of income, not just stating their income on an application. I have never had to provide proof of income for a card

I think most lenders, when you state your income, are assessing the statement against other data they hold or can buy through the credit reference agencies.  Hence, if you say your income is, say £30k per year, and they can see from other data that is consistent, then no need to prove the income. 

If, however, you write "retired" and then still put £30k, but the lender cannot see anything to support that statement within their data, they will ask for proof.  If they then find that the £30k statement does not stack up, then the alert will go out that possible fraud / dishonesty and you don't get a card.

Even ignoring any of that, someone applying for a credit card but living off savings may simply not be an attractive customer for a credit card lender, so decline the card application.  Whatever offer they use to entice you to get the card, say interest-free period, the card company really want you to make them money by incurring charges, or not clearing the balance at the end of the interest-free period.  If it is obvious you have private means and the credit card company will never get a profit from your card, why would they want to give you a card?

Applying and saying I had an income of 25k one year and then £100k the next I am sure would raise flags but otherwise they have no knowledge

Application data is compared using the National Hunter database. A shared resource between all finance organisations. 

Sandtree

Thrugelmir said:

Deleted_User said:

Grumpy_chap said:

Deleted_User said:

I suspect OP means that they are being asked for proof of income, not just stating their income on an application. I have never had to provide proof of income for a card

I think most lenders, when you state your income, are assessing the statement against other data they hold or can buy through the credit reference agencies.  Hence, if you say your income is, say £30k per year, and they can see from other data that is consistent, then no need to prove the income. 

If, however, you write "retired" and then still put £30k, but the lender cannot see anything to support that statement within their data, they will ask for proof.  If they then find that the £30k statement does not stack up, then the alert will go out that possible fraud / dishonesty and you don't get a card.

Even ignoring any of that, someone applying for a credit card but living off savings may simply not be an attractive customer for a credit card lender, so decline the card application.  Whatever offer they use to entice you to get the card, say interest-free period, the card company really want you to make them money by incurring charges, or not clearing the balance at the end of the interest-free period.  If it is obvious you have private means and the credit card company will never get a profit from your card, why would they want to give you a card?

Applying and saying I had an income of 25k one year and then £100k the next I am sure would raise flags but otherwise they have no knowledge

Application data is compared using the National Hunter database. A shared resource between all finance organisations. 

Would have been quicker to say "I agree" or hit the Thanks button

[Deleted User]

Thrugelmir said:

Deleted_User said:

Grumpy_chap said:

Deleted_User said:

I suspect OP means that they are being asked for proof of income, not just stating their income on an application. I have never had to provide proof of income for a card

I think most lenders, when you state your income, are assessing the statement against other data they hold or can buy through the credit reference agencies.  Hence, if you say your income is, say £30k per year, and they can see from other data that is consistent, then no need to prove the income. 

If, however, you write "retired" and then still put £30k, but the lender cannot see anything to support that statement within their data, they will ask for proof.  If they then find that the £30k statement does not stack up, then the alert will go out that possible fraud / dishonesty and you don't get a card.

Even ignoring any of that, someone applying for a credit card but living off savings may simply not be an attractive customer for a credit card lender, so decline the card application.  Whatever offer they use to entice you to get the card, say interest-free period, the card company really want you to make them money by incurring charges, or not clearing the balance at the end of the interest-free period.  If it is obvious you have private means and the credit card company will never get a profit from your card, why would they want to give you a card?

Applying and saying I had an income of 25k one year and then £100k the next I am sure would raise flags but otherwise they have no knowledge

Application data is compared using the National Hunter database. A shared resource between all finance organisations. 

Again you could just admit I'm right instead of trying to keep arguing a point that you're wrong about.

CRAs don't know your income unless you tell them, if you applied for a card and said you had £20k of income and the next card application said £20k of income, no-one would have any knowledge of the transaction. It's only when you do something weird and then get caught out e.g. being asked to prove your income suddenly went to £100k that there is an issue.