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FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

Lending into retirement

The maximum age at the end of the mortgage term is 75 years for all residential lending.

Where all or part of the mortgage is to be conducted on an interest only basis, lending into retirement is not acceptable. This also applies to any part of the lending on a repayment basis.

Lending Into retirement where the applicant has more than 10 years until retirement (at point of application)

  • Affordability calculation will be based on the applicant’s current income only.
  • Evidence will need to be provided to show the applicant is paying into a private/company pension.
  • On the income into retirement screen in TSB Mortgage Pro, select ‘Pension Private – Where the customer has more than 10 years to retirement’ and key £1 in the anticipated annual amount box.

Evidence we will accept:

  • Payslip with monthly pension contribution to company or private scheme.
  • Private pension statement/screenshot showing pension lump sum balance (No requirement for forecast, but it is acceptable if showing on the document).

Lending Into retirement where the applicant has less than 10 years until retirement (at point of application)

  • We will only use employed and self-employed income where the term of the mortgage does not exceed the applicants anticipated retirement age, or 70th birthday.
  • The maximum age at the end of the mortgage term is 75 years for all residential lending.
  • Future retirement income will need to be verified where the applicant is taking a mortgage term which extends beyond their anticipated retirement age or 70th birthday, whichever is the earliest.
  • Affordability will be assessed on both the applicant’s current income and the future retirement income. On occasions, a further review will be required to confirm we feel it is appropriate for the applicant to borrow into retirement.

 

Verifying Anticipated Retirement Income where the applicant has less than 10 years until retirement

The following evidence can be used to verify anticipated retirement income (all must be dated within the last 12 months):

  • Private / Company Pension Forecast Statement (gross annual income)
  • State Pension Statement (obtained from www.gov.uk )
  • Annuity Statement

Other Income

  • If the applicant is in receipt of 'Other Income' this must be captured under the appropriate section of the 'Current Income' screen. If the current 'Other Income' is to continue into retirement this must be included along with any future pension income the applicant anticipates they will receive and captured in the 'Income into retirement' screen.
  • The 'Income into retirement' screen must only be populated with the future income the applicant anticipates they will receive once retired, including any pension they are currently in receipt of if the applicant has less than 10 years until they retire.

Applicant is already Retired

  • Lending into retirement policy treatment rules do not apply where an applicant is already retired.
  • It is important to remember that only pension income that the client is in receipt of at the point of application can be used and captured as 'Other income' within the 'Current income' section.
  • The affordability assessment will be carried out by the system on the income figure that has been entered into the 'Current income' screen.