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NEARLY ONE IN FIVE EMPLOYEES ARE PAID OVERTIME

15-Sep-2015

Aberdeenshire is the overtime capital of the UK but workers in Windsor and Maidenhead are the least likely to earn overtime.

Lenders need to address complex income issues in mortgage market, Kensington believes

Nearly one in five employees receive overtime payments at work boosting their annual income, new analysis* conducted for specialist mortgage lender Kensington shows.

Its analysis of Government data shows 17.7% of UK workers – the equivalent of 5.49 million people – receive overtime payments which could be worth up to £3,000 a year for someone working five hours overtime a week.

Men are more likely to receive overtime pay than women – the analysis shows 22.3% of male workers earn overtime pay compared with 13.2% of female workers.

And there are major regional differences across on the country on how many workers receive overtime pay – employees in Aberdeenshire are the most likely to receive overtime with 28.8% of workers qualifying compared with just 9.6% in Windsor & Maidenhead.

Kensington is highlighting the importance of overtime payments to household incomes as it warns that many mortgage lenders may not count overtime payments when deciding whether to lend to borrowers. The ONS data shows that overtime makes up 2.7% of total average earnings.

However someone on average weekly earnings of £518 working a 37.5 hour week would earn more than £3,000 putting in five hours of overtime for 45 weeks which can add substantially to their ability to borrow and afford a home.

Keith Street of Kensington, says: “Many lenders will focus on basic pay and will not fully account for overtime or other regular payments in affordability their calculations.

“This can have a major impact someone’s ability to borrow enough to buy a home if their total income includes regular overtime payments and, as our research shows, it could prove a barrier to more than 5 million people.

“Kensington aims to treat customers as individuals. Every application is assess by an experienced underwriter and we do not simply reject potential customers on the basis of standard checklists.”

The tables below shows the top 10 local authority regions for overtime and the 10 local authority where workers are least likely to receive overtime.

TOP 10

LOCAL AUTHORITY REGION

PERCENTAGE RECEIVING OVERTIME

Aberdeenshire

28.8%

Shetland Islands

28.1%

Isle of Anglesey

27%

Redcar & Cleveland

26.9%

North Lincolnshire

26.1%

Thurrock

25.8%

East Riding

25.7%

Derbyshire

24.8%

Flintshire

23.7%

Stoke-on-Trent

23.7%

 

BOTTOM 10

LOCAL AUTHORITY REGION

PERCENTAGE RECEIVING OVERTIME

Windsor & Maidenhead

9.6%

Inner London

10%

Derry

11.7%

Blackpool

11.7%

Wokingham

12.2%

Conwy

12.3%

Bath and North East Somerset

12.8%

Brighton & Hove

13.1%

Bracknell Forest

13.5%

Cardiff

14%

 

Kensington mortgages are for customers with complex income and, where appropriate, can take account of 100% of additional earnings depending which can include bonuses, overtime, second jobs as well as investment and pension income. Kensington mortgages are only available through professional mortgage intermediaries, such as mortgage brokers and IFAs.

* Kensington analysis of ONS data on overtime and bonus payments in Annual Survey of Hours and Earnings
** UK labour force is 31.03 million http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/august-2015/statistical-bulletin.html