where has the credit gone?

[winterblues25]

I’ve usually never had a problem being accepted for credit but just tried to increase my credit limit on my card recently and was refused, new balance transfer card and loan applications refused, credit score good, even the balance transfer offers on my credit card which I’ve had for years have been withdrawn??

@winterblues25 it’s not just us on this thread that thinks it’s all a bit…. Illogical.

Your bank does too. Hence putting up these obstacles for you getting any more credit with them. They think you are too big a risk

i reccomend following thatgirlin_debt on Instagram for ways to bring your debt down.

not sure of answer to new credit applications. Have you tried joint applications but also a single one just in your name of husbands name to see if that makes difference?

<sigh> Like heating. I know.

@winterblues25 wont because now it would appear that not even the tiniest bit concerned about the debt, all is hunky dory, and no credit won’t have the tiniest impact on very very healthy family finances

OK yes @winterblues25 you’re right and I’m wrong. The stats prove it after all:

• The majority of YP aged 18 who are going to uni live with one parent earning minimum wage or £10k or less above that, or else they live with both parents, but one parent doesn’t work (and the other parent earns min wage or £10k above it). So they get max maintenance loan or at least about £8.5k of it.
• And all the YP who live with both parents, and both parents work – they don’t go to uni I guess. Or most of them don’t. It’s all clear now.

As it goes I actually think that the threshold for min loan is too low as it is disenfranchising a lot of households where the income, at about £60k pa, is not really that high (if two incomes anyway). But maybe I shouldn’t be concerned.

Apologies if it had been asked @winterblues25 but if DSC are getting student loans. Were they 50:50 with your dh’s ex? Does she earn more or less? If she earns less surely it’s batter to base loans off of her household?

We’re enough below the 100k threshold that we are not having to worry about losing funded childcare thankfully. DH has the skills, experience, talent and
willingness to earn 100k and his company would love it if he took on the extra work and responsibilities which would earn him a salary of this level, and help grow their business further. However we would be worse off financially and not worth it for the sacrifice of time together and being able to support me at home. Obviously if we were better off we could mitigate that with some paid household help and and the opportunity for us to have some quality time together on a long awaited holiday but we wouldn’t be so it is fairly pointless. Even the opportunity to save extra on our pension isn’t worth the sacrifice at the moment.
It does rather explain why the country’s productivity is down the pan, equally no doubt many surgeons with young families who could get waiting lists down are also equally disincentivized by the UK tax system.
Both our companies match our pension contributions, in my case x3 and in DH case x1 plus 20/40% tax benefit. I can put up to 6.5% in my pension and DH can put up to 6% of his salary (more in the previous company he worked for) so we have opted to go for that. It’s left us with just enough for all our basics (meticulously budgeted) When we bought our house we needed carpets, curtains etc so that go us into initial debt then when we had our children there wasn’t the funded childcare or flexible working opportunities e.g set days. Thus we were on a deficit even with every cut backs we made. During more fruitful years e.g when children old enough to be eligible for funded hours and our mortgage rate reduced then we got as far as paying off 8k until our mortgage rate went up and then I also subsequently went on maternity leave. I received full pay for the 1st 6 months but then much less for the final 6 months. Then when I returned to work found out the funded childcare didn’t kick in until 14 months, not 9 months as is stated (as is the term after they are 9 months so if 9 months in the April funding doesn’t start until the September). Obviously we’ve been able to up our repayments since I’ve returned to work

She earns enough for them to recieve the minimum maintenance loan but they also mainly live there in the long uni holidays, even the full maintenance loan wouldn’t cover their accommodation and food etc at uni. She does effectively contribute 50/50 to what they need and they both have jobs also for non essential costs. At the end of the day when they had their children, both being university educated high earners, this is the minimum of what they expected they would provide for their children, it wasn’t for me to come along and massively downgrade their lifestyle they’d agreed to maintain for their children on divorce. Obviously if DH earnings had reduced for whatever reason than he couldn’t do that, just as if they’d been together and than had happened but otherwise we couldn't just walk over the settlement they’d had on divorce. Sometimes keeping everyone happy is worth a lot more than a bit of debt which isn’t an issue for us

I must confess that Im somewhat baffled as to why you have gone straight to topping up your pensions leaving yourselves with debt and scraping by ?

I say this as someone who maxed out their pension once I had gone through ML etc
But had considerable savings, emergency fund and investments

You say DH?
Are you married?
Why are you carrying the debt and not DH?

@winterblues25

If you take it that 50% of 14 year olds (so probably even fewer 18 year olds) live with both parents and in only 55% of those households do both parents
work full time. This could be a full time salary of 20.5k (Mon-Fri 9-5 with a 1 hour lunch break at min wage plus 8% auto enrolment pension deduction) if they have any other children or work related expenses there are also additional disregards to their income.
Given that the UK median full time income is 39k then you can assume for most of those minority of households where there are 2 parents and they are both working full time, their salaries may equal more than 20.5k each (assuming no disregards) However many mothers take a significant long term pay hit in an effort to balance work and family and even those mothers working full time are unlikely to be earning a median salary anywhere near 39k. Most fellow mothers I know don’t have a FTE salary anyway near this level nor work full time. The only ones I do know of are single mothers ( and their average full time salary is apparently 28k)
Your assertion that the majority of 18 year olds live in a household with a residual assessed income of 60k is unlikely. There are probably a significant minority where by the residual household income is much more than 60k and given that these are the people you clearly associate with it has probably skewed your view as to the sorts of households most 18 year olds live in. If we also take into account the demographic of students who attend university (which has been rising rapidly among lower income households) then it wouldn’t surprise me if around 50% of students do not receive a deduction of several thousand pounds from their maintenance loan due to parental residual income. When I attended university there was only 1 student within our group who had her maintenance loan fully reduced due to parental income. Speaking to my nieces, they are on minimum maintenance loans but the majority of their friends have not had their loans reduced by several thousand. Without accurate published figures either of us could be right or wrong, we don’t actually know. What I do know is when I am discussing the issue with friends whose children are going up to university, many of them seem to be on the threshold of extra earnings affecting the loans their children will be eligible. So your original assertion many posts ago that impact of extra earnings are not a consideration for parents as the majority of students recieve the minimum maintenance loan anyway and that only the small minority of parents on 25k should even be assuming they’ll not have to make a significant contribution is definitely not the case in my experience

Yes we’re married. Topping up pensions makes more sense long term for us £300 put into DH work place pension is £720 in the pension after being matched by his employer and a 40% tax rebate added on. Actually more so given the child benefit higher income charge and NI saving. £300 we then spend on food and clothes on the credit card had been charged at an interest rate of 5% - £15 a year for us to have a gain exceeding £420, even with an interest rate of 13% it makes sense. My pension scheme is a career average scheme with employer contributions equating to around x 3 my contributions. Once we can afford to pay off the debt and continue topping up our pensions we’ll do both. We do have an emergency fund as we realise the importance of having readily available cash for things we can’t pay for on a credit card. I’m holding the debt as I’m the one who does all the shopping, we do have a joint account though

My point is that the credit has not gone!

Your assertion that the majority of 18 year olds live in a household with a residual assessed income of 60k is unlikely. There are probably a significant minority where by the residual household income is much more than 60k and given that these are the people you clearly associate with it has probably skewed your view as to the sorts of households most 18 year olds live in.

I imagine there are probably statistics available (I can't be bothered to search) about how students fund higher education and what proportion of students are eligible for full maintenance loan, partial, minimum.

I do agree that viewpoints are probably skewed - MN seems to have a huge number of parents whose student DC get minimum loan, as does WIWIKAU (arguably largest forum for parents of university students). However, I also think it's true that the people who tend to post and therefore are noticeable are those whose DC are only eligible for minimum loan despite their household income not being particularly high in the scheme of things, and therefore not knowing how they are going to top up.

I also suspect there is some link to actual university. I have a university DC but everyone she knows gets minimum maintenance loan or only just over, and she doesn't tend to mix with those from very affluent backgrounds! Therefore I'd "assumed" that minimum was now most common. However, she goes to a uni in a more expensive place, so perhaps lower income families either don't have DC there, or they commute in (so DD doesn't socialise with them so much).

It's an interesting point which nicely demonstrates how perception may vary and reality may be totally different!

But when you don’t clear the balance down you pay the interest charge again and again and again. The maths for paying into a pension but going into debt to do so just does not stack up.

even more so if it’s to fund lifestyle choices

op you’ve been incredibly defensive and bordering nasty on this thread to people who have experience of debt and can just see that you’re in a bit of trouble here, and defending choices that are making it worse

you have your fingers in your ears, and are relying on maths that isn’t right

Absolutely, my discussion started as Cary asserted that maintenance loans assessments were not a consideration as the majority of parents of 18 year olds earn over 60k anyway, and also implied they are also happy to plan to pay this contribution therefore the thought of the impact of extra earnings don’t enter their head. This is not the case in my experience of parents and students I have known but I acknowledged we are not working on specific stats which will give us the answer, nor is Cary

So even if we paid interest on that £300
for 10 years, which btw was 0% for the first few years, then 3.9% and now 4.9% potential rising to 13% but will very likely be paid off in a couple of years. That’s a total of no more than around £100 in interest but the gain was £420+ (plus as I haven’t added in the gains from having a lower child benefit higher income
charge or NI bill) nor have I added in the significant gains of the growth of that £720 in the course of that time - how do those maths not add up to you?

I’ve thought incredibly carefully about our financial management and what we chose to spend our EARNINGS on and what would be the point of doing that if I couldn’t justify my decisions? Do you call
everyone who explains their decisions when asked to you ‘defensive’?

I‘ve been very clear I am not looking for budgeting or advice. Granted some people have seen the word debt and think it tallies their own situation where debt became an issue for their ability to happily live their daily lives and offered well
meaning advice not peppered with patronising preaching. I have indicated my appreciation to them despite their advice being unsolicited.

Fine I’m out
everyone is terrified of debt but you’re fine.
we’re all patronising you, preaching how you should live in a cardboard box until you save up for your house, and how were much better than you.

you do you

It’s clearly not gone completely but appears to be being reduced and interest rates increased, you pointlessly try and assert to being on some pedestal of financial virtue above us when you are clearly not.

Thank you, have been trying to make clear this entire thread that ALL I wanted to know were people’s current experiences of credit i.e being accepted for credit and at what rate. You’ve finally understood 👏👏👏👏👏

Yes good points @redskydelight

I like the idea that I associate with people whose income is much more than £60k! Not so much actually. Most of the families I know tho who have 18yos do have both parents working. If your DC are at uni you are probably in your late 30s/early 40s or older, so have spent perhaps 15-20+ years in the workplace. I have pretty much always worked, but due to a slightly random career trajectory, three mat leaves plus choosing to work in a badly paid industry (my choices, not blaming anyone) I think my salary has never hit the heights that might be expected of a uni graduate. And yet my salary plus DH's min wage salary adds up to min loan for DS2.

So my take on it (and also as I say based on DCs' friends parents, people DC have known at uni, MN threads as redsky says) is that a fair number of YOP are on min loan, sometimes to the surprise of their parents who don't see themselves as high-earning families.

If you know loads of parents whose HH income is about £30k @winterblues25 then yes, their DC will get a much higher loan. My suspicion is that sadly a lot of DC in low-earning families (bc let’s face it, a HH income of <£25k is low-earning) don’t think uni is "for them" so I am actually heartened to hear that this is not the case in your circle.

@winterblues25 I never said or implied that parents are happy to make up the maintenance loan! in fact many parents as I say seem surprised at it. I also said that I think the threshold is too low – I don't see £60k HH as a high salary, 2 x £30k?

I have tried to find stats about the percentage of students claiming a full maintenance loan but not been able to track that down so I guess we are all relying on anecdata. I am glad as I say that you know ppl who will get the full loan and are going to uni.

Well I’m not in debt to the tune of £8,000 for a start!

Debt which we could clear tommorow by downsizing the family car. No doubt you could match our pension assets and housing equity too?

you have no idea of my pension assets or my housing equity status. But I don’t have 3 children to raise up to the age of 18 (both of mine adults now and working) so I’m definitely a lot better off than you in many respects.

🙄