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State Pension-Loan query

pedro9955
pedro9955 Posts: 6 Forumite
Seventh Anniversary First Post
edited 21 August 2021 am31 9:43AM in Loans
Hi newbie poster so apologies if wrong forum topic for this post.
I have been retired for 6 years and my wife(also retired) have been living on our work pensions for day-day finances and some savings for bigger purchases. Although our credit rating is very good the prospect of "loan" does seem poor? Will this change when I officially become an OAP in a few weeks and receive my state pension? Is this classed as a regular income?
Reason for asking is looking to purchase a new(er) car and don't want to deplete the savings  so looking to a loan, finance or PCP deal.
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Comments

  • Browntoa
    Browntoa Posts: 49,551 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    It's state income so guaranteed

    Affordability is the requirement now , this may improve it.

    I'll move to credit and loans forum
    Ex forum ambassador

    Long term forum member
  • xylophone
    xylophone Posts: 45,428 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Have you actually checked car finance deals?

    I know a chap who is an occupational and state pensioner and had no difficulty whatsoever in obtaining 0% two year finance on his latest car.

    Nor did he have any trouble in this regard when he was retired on only his occupational pension.
  • DrEskimo
    DrEskimo Posts: 2,384 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    pedro9955 said:
    Hi newbie poster so apologies if wrong forum topic for this post.
    I have been retired for 6 years and my wife(also retired) have been living on our work pensions for day-day finances and some savings for bigger purchases. Although our credit rating is very good the prospect of "loan" does seem poor? Will this change when I officially become an OAP in a few weeks and receive my state pension? Is this classed as a regular income?
    Reason for asking is looking to purchase a new(er) car and don't want to deplete the savings  so looking to a loan, finance or PCP deal.
    Can you not just buy a cheaper car (used for example) that doesn't deplete your savings?
    Then you just pay yourself the loan payments and rebuild your savings that way.

    Unless it truly is 0% finance (most examples I have seen have smaller deposit contributions on new cars, or used cars have a higher mark up) then borrowing will just increase your costs.
  • There is a strange mentality of savings, you see it on the savings board with people gushing over a £250 a month regular saver that pays 3.5% and gains £56.58 in interest vs any sort of loan costs dwarfing the gains you get (unless it's really 0% where you could do the best of both worlds and have the money in savers to pay off the finance at the end). Depleting savings vs costs of hundreds a year in loan is a no brainer yet people still have this idea that earning pennies is a better idea.
  • kaMelo
    kaMelo Posts: 2,743 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    There is a strange mentality of savings, you see it on the savings board with people gushing over a £250 a month regular saver that pays 3.5% and gains £56.58 in interest vs any sort of loan costs dwarfing the gains you get (unless it's really 0% where you could do the best of both worlds and have the money in savers to pay off the finance at the end). Depleting savings vs costs of hundreds a year in loan is a no brainer yet people still have this idea that earning pennies is a better idea.
    Whilst I agree with the sentiment I see no mention of it on the savings board, indeed I go as far as to suggest the advice given is always the opposite. If the debt incurs a higher interest rate than what savings are offering then pay the debt off with savings.

    People "gushing" about the specific product you mention do so as they have money looking for a home and no debts to pay down with it.
  • kaMelo said:
    There is a strange mentality of savings, you see it on the savings board with people gushing over a £250 a month regular saver that pays 3.5% and gains £56.58 in interest vs any sort of loan costs dwarfing the gains you get (unless it's really 0% where you could do the best of both worlds and have the money in savers to pay off the finance at the end). Depleting savings vs costs of hundreds a year in loan is a no brainer yet people still have this idea that earning pennies is a better idea.
    Whilst I agree with the sentiment I see no mention of it on the savings board, indeed I go as far as to suggest the advice given is always the opposite. If the debt incurs a higher interest rate than what savings are offering then pay the debt off with savings.

    People "gushing" about the specific product you mention do so as they have money looking for a home and no debts to pay down with it.

    Read the OP, they are talking about taking out finance when they have savings. The more general point is that savings rates are terrible, 3.5% on a regular saver is seen like the second coming of Yeshua, but earns a pittance and likely OP's savings are even less if they're in some sort of longer term account that could be effectively losing them money. No point taking finance where you pay hundreds in interest and having short term savings where at best you can get less than £60 at the end of the year
  • kaMelo
    kaMelo Posts: 2,743 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    kaMelo said:
    There is a strange mentality of savings, you see it on the savings board with people gushing over a £250 a month regular saver that pays 3.5% and gains £56.58 in interest vs any sort of loan costs dwarfing the gains you get (unless it's really 0% where you could do the best of both worlds and have the money in savers to pay off the finance at the end). Depleting savings vs costs of hundreds a year in loan is a no brainer yet people still have this idea that earning pennies is a better idea.
    Whilst I agree with the sentiment I see no mention of it on the savings board, indeed I go as far as to suggest the advice given is always the opposite. If the debt incurs a higher interest rate than what savings are offering then pay the debt off with savings.

    People "gushing" about the specific product you mention do so as they have money looking for a home and no debts to pay down with it.

    Read the OP, they are talking about taking out finance when they have savings. The more general point is that savings rates are terrible, 3.5% on a regular saver is seen like the second coming of Yeshua, but earns a pittance and likely OP's savings are even less if they're in some sort of longer term account that could be effectively losing them money. No point taking finance where you pay hundreds in interest and having short term savings where at best you can get less than £60 at the end of the year
    Suitably chastised I'll go and eat my humble pie. 

    I'd misunderstood your post thinking it was aimed at the savings board rather than the OP,  (don't ask, I can't answer why) but now I get it was aimed a the OP I concur with what you've said.
  • kaMelo said:
    kaMelo said:
    There is a strange mentality of savings, you see it on the savings board with people gushing over a £250 a month regular saver that pays 3.5% and gains £56.58 in interest vs any sort of loan costs dwarfing the gains you get (unless it's really 0% where you could do the best of both worlds and have the money in savers to pay off the finance at the end). Depleting savings vs costs of hundreds a year in loan is a no brainer yet people still have this idea that earning pennies is a better idea.
    Whilst I agree with the sentiment I see no mention of it on the savings board, indeed I go as far as to suggest the advice given is always the opposite. If the debt incurs a higher interest rate than what savings are offering then pay the debt off with savings.

    People "gushing" about the specific product you mention do so as they have money looking for a home and no debts to pay down with it.

    Read the OP, they are talking about taking out finance when they have savings. The more general point is that savings rates are terrible, 3.5% on a regular saver is seen like the second coming of Yeshua, but earns a pittance and likely OP's savings are even less if they're in some sort of longer term account that could be effectively losing them money. No point taking finance where you pay hundreds in interest and having short term savings where at best you can get less than £60 at the end of the year
    Suitably chastised I'll go and eat my humble pie. 

    I'd misunderstood your post thinking it was aimed at the savings board rather than the OP,  (don't ask, I can't answer why) but now I get it was aimed a the OP I concur with what you've said.
    Exactly, this idea of having a safety net is great, particularly when working in case you lose your job but 2 pensioners aren't going to lose their income in any realistic scenario so them keeping savings and incurring interest on finance is daft.

    If they can get 0% interest however, I would personally pay into a savings account (the 3.5% one is for previous customers only unfortunately) or something like the virgin current account at 2% for £1000 to at least get something back
  • xylophone
    xylophone Posts: 45,428 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    My acquaintance tells me that he traded in his old car for the new one ( deposit) and there was no problem at all about 0% finance for two years for the balance.

    As he said, there was no point in financing the balance using  money from savings on which he was getting at least some interest.
  • Thanks for the comments. Our savings make virtually zero interest despite moving things around from time to time. Its more the safety net argument. Never having a lot of savings in life  its a thought to ship out a few K's on something that will depreciate when you drive it off the forecourt when for £200-£300 pounds per month you can have a newer, reliable(?) product which I need in a modern family life. A dilemma!!!!
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