Problem with calculating annual income to open bank account

eskbanker

Placitasgirl said:

I agree that savings interest is not usually taken as “income” in this context, ie opening a bank account. My husband and I recently decided to make one of his accounts joint but when asking about my gross annual income they said that my savings interest of over 1300 a month could not be used as income and that only my small bank pension could, we decided not to proceed as they said it would likely decline. I have the proceeds from the sale of my home working for me and draw the interest as “income” each month, so I’m glad I asked the question before getting that far as it wasn’t something we’d thought about before beginning the application. 

Which bank was that?  Ultimately they can each specify their own criteria, but if HMRC regard it as income, I don't see why a bank should take a different stance....

MoneyChoices2

Hi everyone
Thanks for your help, I quoted my pension and lump sum and savings as income. I wasn’t accepted for an interest paying account but was for a basic account.This will help in the new way I’m trying budgeting these year with one account for income and one account for expenses. 

i suspect I was rejected because I didn’t have enough income for them.

Thanks for all your help

Money Choices2

[Deleted User]

Reminds me of a time I applied for a basic bank account and accidentally put my yearly income as my monthly income. I received a letter asking if I was sure about the income and to call them, I did so and was almost accused of fraud, but in the end they accepted it was a mistake but declined the application. So basically sometimes they do check it.

boingy

From the bank's point of view they want to know what the typical throughput of cash will be each month so I'd give them the figure that best represents what you "pay" yourself, regardless of the sources. In other words, tell them how much you will typically deposit in the account each month. I have a similar thing because my pension is in drawdown so I get to decide my "salary". Never had any issue with opening accounts (and I've opened lots!)

x44

mta999 said:

I always thought interest from savings does not count as income in this scenario

There will be quite a few people who have early retired so are not yet in receipt of their pensions who are living on 'income' from their savings - which might be both savings interest and dividend income.

In fact this scenario is increasingly common as people work out how much they have or need to live on to bridge the gap between early retiring and getting their pensions.

So I'd say for these purposes "income" is the same as those figures reported to HMRC as income, and most likely those having enough savings/dividend income to live on will be reporting to HMRC via self assessment so the figure should be instantly available.

Kim_13

eskbanker said:

mta999 said:

I always thought interest from savings does not count as income in this scenario

Why wouldn't it - it's income and is taxed accordingly (subject to allowances, etc)?

Indeed. If you knew some of the savings would be spent shortly, then it would be correct to exclude interest on those from the calculation. They don't expect you to know your income exactly, but as long as you have given them a realistic estimate. Rates rise and fall, people change jobs mid year etc. 

I have never known a bank say that interest should be excluded - though I exclude Premium Bond prizes as nothing is guaranteed there. I have however seen some say to exclude benefits - there may be an information icon to click on which will state what they regard as income.

Bigwheels1111

MoneyChoices2 said:

Hi everyone
Thanks for your help, I quoted my pension and lump sum and savings as income. I wasn’t accepted for an interest paying account but was for a basic account.This will help in the new way I’m trying budgeting these year with one account for income and one account for expenses. 

i suspect I was rejected because I didn’t have enough income for them.

Thanks for all your help

Money Choices2

I don’t know what you’re doing wrong. Interest paying account?.
Like Chase for eg. No credit check. 
I’ve been accepted for any account that I applied for.

Until this year my only official income was 4k for carers allowance.
I also get a good income from savings. Over 10k.
Gave a figure, a tad higher than I had coming in.
Never been asked for proof etc.
Although over 135k a year will move through my account.
5k a month for reg saves, 1k bills, interest, wages now
Then maturity payments.
Just added it up an I’m staggered.
Now wonder I’m not having any issues.

GeoffTF

I am not sure what the problem is here. The OP has been accepted for a Basic Bank Account. His income is irrelevant for that. He should be able to open a savings account too. You will find the Skipton Building Society application form if you search for "Skipton application form". That does not ask for your income. I do not expect that the Skipton is uniquely liberal in that respect.