Please be aware of the changes to NatWest’s criteria in relation to contractors income and family based or non-court-ordered maintenance payments. If you have any queries, please contact your local BDM or ask via NatWest’s LiveTalk
Changes as follows –
From Monday 12 December, the way we assess the income of self-employed contractors earning more than £75,000 a year will change, as well as the income proofs we require from them.
We will calculate their income as their average weekly contract income multiplied by 46, provided they can evidence:
- over a 12-month period (incorporating the date of application) they have received or will receive sufficient income from one or more contracts
- they have received a minimum of 6 months’ income from one or more contracts immediately preceding the date of application
- they have had no more than a 6-week break between contracts in the 12-month period
- their latest 3 months’ consecutive personal bank statements for their main account (not required if their main account is with NatWest or RBS)
To ensure we meet our commitment to responsible lending, when considering the committed expenditure of self-employed contractors earning over £75,000 a year, please ask your customers to take into account any professional fees and expenses relating to their role that will need to be covered on an annual basis. These may include but are not limited to costs such as indemnities, subscriptions, professional memberships and training expenses in order to complete their duties. Extended travel and accommodation costs that are not reimbursed via a contract should also be seen as an expense.
Scenario examples
Acceptable
- Applicant has received 10 months’ income from one or more contracts immediately preceding the date of application and has 2 months’ future earnings remaining on one or more contracts.
We will accept this because the applicant has received at least 6 months’ earnings from one or more contracts immediately preceding the date of application and has 2 months’ future contracted earnings left to receive that will total 12 months’ earnings.
- Applicant has received 6 months’ income from one or more contracts immediately preceding the date of application and has 8 months’ future earnings remaining on one or more contracts.
We will accept this because the applicant has received at least 6 months’ earnings from one or more contracts immediately preceding the date of application and has 8 months’ future contracted earnings left to receive that will total 14 months’ earnings. In this instance, we will take the applicant’s historic 6 months’ income together with 6 months of their future contracted earnings to calculate their average weekly income from exactly 12 months.
Unacceptable
- Applicant has received 6 months’ income from one or more contracts immediately preceding the date of application and has 4 months’ future earnings remaining on one or more contracts.
We will not accept this because the applicant is only able to evidence a total of 10 months’ earnings from their contracts and not the minimum requirement of 12 months’ earnings.
- Applicant has received 3 months’ income from one or more contracts immediately preceding the date of application and has 9 months’ future earnings remaining on one or more contracts.
We will not accept this because the applicant is only able to evidence a total of 3 months’ earnings from their contracts immediately preceding the date of application and not the minimum requirement of 6 months’.
Non Court Ordered Maintenance Payments
In addition to accepting court ordered maintenance and child maintenance, we will accept family-based or non-court ordered maintenance and child maintenance payments provided that:
- the payments can be evidenced to have been in place for at least six months
AND
- the payments are expected to continue at the current level for the foreseeable future, taking into account the age of children
