Credit card eligibility in the days of defined benefit pensions

graemev

Now I do have several credit cards, but I notice Amazon BarclayCard is offering quite good cashback (2% @ Amazon , 1% elsewhere) so I'm minded to get one.

Now I actually have some annuities paying out, but for the sake of argument let's assume I don't.

So many folks, moving forward, will have DB (Defined benefit) pensions. Assuming they don't buy an annuity , the common thing would be to "drawdown" cash as an when it's needed , e.g once a year or when you want to pay for a major purchase etc.

So, in effect, you have no income (as a perverse example , for a long while "Elon Musk" also had no "income" ... just a whole lot of money)

So how do you respond the C.card questions like "what is your income?"

Voyager2002

I am sure that such people would have some regular income, if only the state pension. To this should probably be added the amount "drawn down" in the previous financial year, possibly grossed up to reflect any tax-free drawdown.

eskbanker

graemev said:

So many folks, moving forward, will have DB (Defined benefit) pensions. Assuming they don't buy an annuity , the common thing would be to "drawdown" cash as an when it's needed , e.g once a year or when you want to pay for a major purchase etc.

So, in effect, you have no income (as a perverse example , for a long while "Elon Musk" also had no "income" ... just a whole lot of money)

DB pensions are the ones that pay out a monthly income - you're referring to DC (defined contribution) pensions, which build a pot that's flexible to access as you see fit....

DullGreyGuy

graemev said:

Now I do have several credit cards, but I notice Amazon BarclayCard is offering quite good cashback (2% @ Amazon , 1% elsewhere) so I'm minded to get one.

Now I actually have some annuities paying out, but for the sake of argument let's assume I don't.

So many folks, moving forward, will have DB (Defined benefit) pensions. Assuming they don't buy an annuity , the common thing would be to "drawdown" cash as an when it's needed , e.g once a year or when you want to pay for a major purchase etc.

So, in effect, you have no income (as a perverse example , for a long while "Elon Musk" also had no "income" ... just a whole lot of money)

So how do you respond the C.card questions like "what is your income?"

That would be DC not DB. 

In principle it depends if you are living off investment returns or spending your capital, same as those of "independent means". 

graemev

eskbanker  I do of course mean DC (Defined Contribution) my bad :-( ....so the answer to the CC question "What is your income, is ...what ever it needs to be"  which does not help with a number .

Voyager2002 , no really, I have at least one friend who only has DC pots (over million £) and  is not of pension age yet, so no regular income .

DullGreyGuy ,  ... same as those of "independent means".   ... indeed. So what do these guys put on these forms?

You can see many YouTube videos  "Mr X has pot of £xxx draws a state pension and takes £80K a year from his pots"  ...Now I KNOW nobody would really do that ...if you took £80K out each year you'd pay a lot of tax, then if you didn't spend it, more tax on any interest ...so Mr X would take just what he needs  and leave the rest in the pots. If he needed £200K one year he'd take that ...so his "income" would just be his state pension, which does not seem a very realistic view.

One obvious answer is just "make up a number" . But then you risk getting "blacklisted" WRT your credit rating  and of course there's no point in "trying to explain to a person" because they just have a screen and a form to fill in.

BTW. I can't see a way to correct the title of the original post.

DullGreyGuy

graemev said:

DullGreyGuy ,  ... same as those of "independent means".   ... indeed. So what do these guys put on these forms?

What their investment return/ interest/ trust fund payment etc? What their means is generating without actually dipping into their means.