Group Income protection - who accepts

ASB1960

I am 62 looking to remortgage.

I receive income via payroll from a group income protection scheme until 67. Claim started 2016. Also get car allowance, pip, support group contribution based esa and an annuity.

I am looking to remortgage because my interest only term expires in 2 years. Ideally I would probably look for a RIO.

Any knowledge on lenders who will accept the payment, either as income or as pension.

Does equality act possibly apply as a reasonable adjustment?

kingstreet

That close to retirement, you will find most lenders will work only from projected pension income. As the PHI payments stop in five years, they are unlikely to be accepted as income.

MWT

As I understand it, the RIO products will require evidence to support a guaranteed income through retirement sufficient to meet their affordability requirements, so that is likely to be more important, as kingstreet suggests...

If you have a large enough pension that will cut in when the PHI stops then I would hope there will be a RIO option for you, just talk to a good broker that handles retirement products...

dunstonh

Does equality act possibly apply as a reasonable adjustment?

No it doesn't.

kingstreet

Here's the Leeds RIO criteria, as an example;-

Income assessment

Affordability will be assessed on the applicant’s ability to maintain mortgage payments for the life of the mortgage, using the lower of the following:

• Current income which can be evidenced
• Projected income in retirement, including any transferrable pension benefits, which can be evidenced

For joint borrowers, affordability will be assessed on the lowest earner to ensure ability of a surviving borrower and/or last borrower residing in the property to maintain payments.

Retirement age is defined as either the applicant's stated retirement age or 70 years, whichever is the earlier. When in retirement employed or self-employed income should not be used to assess affordability.

Please note:

The income used to assess affordability should be sustainable for the life of the mortgage. Acceptable income types include:

• Pension income, including state and private pensions, annuities, and appropriate income drawdown plans and SIPPs.
• Transferrable pension benefits
• Income from sustainable investments
• Sustainable income from rental properties

ASB1960

For anybody else finding themselves in a similar position Cambridge Building Society were the eventual lender I could find who would accept both the PHI for support up to age 67 and projected pension to support beyond age 67.

Barclays, Natwest and FD (existing lender) were the only other lenders I found who would accept PHI - but only up until age 67. They wouldn't accept projected pension beyond.

A RIO proved elusive. Providers were only really interested in current pension and rental income for affordability.