Retiree credit application

baz8755

I am recently retired and drawing down my pension via UFPLS.

For tax reasons I only budget to take £17K pa and then if need be take another chunk, I could easily withdraw a substantially larger amount each year but see no need to at the moment.

When applying for credit cards I am unsure what amount to enter, I have entered £17K but understandably I get a small credit limit when I could easily cover a lot larger debt.

What is the best approach when applying for a card in this situation.

DE_612183

why do you want to take out a credit card?

you can't lie on the application, so I don't know what else you can do, usually if you pay off balances in full after a few months you may get an offer of a higher limit.

DullGreyGuy

baz8755 said:

I am recently retired and drawing down my pension via UFPLS.

For tax reasons I only budget to take £17K pa and then if need be take another chunk, I could easily withdraw a substantially larger amount each year but see no need to at the moment.

When applying for credit cards I am unsure what amount to enter, I have entered £17K but understandably I get a small credit limit when I could easily cover a lot larger debt.

What is the best approach when applying for a card in this situation.

Not to commit fraud. 

Is £17k draw down eating into your capital or just skimming off (some) the returns?

Assuming you arent going into the capital then you declare £17k as thats the income you're receiving. If you're eating into your capital by taking the £17k then some banks won't accept it as income but consuming savings. 

baz8755

DE_612183 said:

why do you want to take out a credit card?

you can't lie on the application, so I don't know what else you can do, usually if you pay off balances in full after a few months you may get an offer of a higher limit.

No-one ever said anything about lying but common sense would dictate that I could easily afford to repay a debt far greater than the amount I have chosen to drawdown.

I want to make a large purchase and would keep the funds invested for a bit longer and preferably into the next tax year.

baz8755

DullGreyGuy said:

baz8755 said:

I am recently retired and drawing down my pension via UFPLS.

For tax reasons I only budget to take £17K pa and then if need be take another chunk, I could easily withdraw a substantially larger amount each year but see no need to at the moment.

When applying for credit cards I am unsure what amount to enter, I have entered £17K but understandably I get a small credit limit when I could easily cover a lot larger debt.

What is the best approach when applying for a card in this situation.

Not to commit fraud. 

Is £17k draw down eating into your capital or just skimming off (some) the returns?

Assuming you arent going into the capital then you declare £17k as thats the income you're receiving. If you're eating into your capital by taking the £17k then some banks won't accept it as income but consuming savings. 

Again no-one is planning to commit any kind of fraud but as I have already said common sense would dictate that I could easily afford to repay a debt far greater than the amount I have chosen to drawdown.

The drawdown is definitely not eating into the capital but even if it were that is the point of a pension to provide an income.

DE_612183

Perhaps you should explain this to the credit card company - obviously your situation doesn't fit into their normal customer profile that they can carry out a risk assessment of.

So in answer to your original question "What is the best approach..." - the answer is to speak to the company themselves.

DullGreyGuy

baz8755 said:

DullGreyGuy said:

baz8755 said:

I am recently retired and drawing down my pension via UFPLS.

For tax reasons I only budget to take £17K pa and then if need be take another chunk, I could easily withdraw a substantially larger amount each year but see no need to at the moment.

When applying for credit cards I am unsure what amount to enter, I have entered £17K but understandably I get a small credit limit when I could easily cover a lot larger debt.

What is the best approach when applying for a card in this situation.

Not to commit fraud. 

Is £17k draw down eating into your capital or just skimming off (some) the returns?

Assuming you arent going into the capital then you declare £17k as thats the income you're receiving. If you're eating into your capital by taking the £17k then some banks won't accept it as income but consuming savings. 

Again no-one is planning to commit any kind of fraud but as I have already said common sense would dictate that I could easily afford to repay a debt far greater than the amount I have chosen to drawdown.

The drawdown is definitely not eating into the capital but even if it were that is the point of a pension to provide an income.

But thats the same as someone with a minimum wage job but a £500k in the bank. With some credit card companies you can declare the two separately... salary from the job and investment income, most won't be happy with those needing to use the capital. 

I would argue the idea of pensions has changed significantly since Pension Freedoms, the idea was supposed to be an income for life, you weren't supposed to be able to run out of money if you expected to live to 75 and so are spending hard but then end up living to 105 and in good health until almost the end. Its not an endless supply of money and personally wouldn't be too surprised if creditors dont start asking more questions as those with annuities and DB schemes die out and are replaced by people using drawdown etc who are potentially carry much more risk

Nasqueron

Any "guarantee" of a credit card that could be withdrawn and spent cannot be used to back a credit card limit increase as the bank has to follow responsible lending rules and not give you a higher limit based on money you could spend.

poseidon1

An interesting variant on the OPs predicament.

My entire retirement income is investment related upon which 40%  self assessment  tax is paid. When applying for credit cards over past 8 years, that self declared income gave rise  to credit card limits in the £9k to £12k range no problem. Similarly with leasing cars on finance, best rates provided.

However when it came to mortgage application, all my investment and savings income sources were disallowed point blank ( interest, dividends, commercial property rent etc).  It was not until the commencement  of the state pension was I was then able to secure a Barclays  mortgage (£55k) solely based on the state pension.  By contrast and  years before,  Barclays happily granted a £12k credit card limit  on investment income alone. Go figure.