Mortgages  

Kensington warns rivals aren’t considering overtime

Kensington warns rivals aren’t considering overtime

Nearly one in five employees receives overtime payments at work, boosting their annual income, according to Kensington’s analysis of Office for National Statistics data.

The research showed that 17.7 per cent of UK workers, the equivalent of 5.49m people, receive overtime payments which could be worth up to £3,000 a year for someone working five hours overtime a week.

It also showed that men are more likely to receive overtime pay than women, with 22.3 per cent of male workers earning overtime pay, compared with 13.2 per cent of female workers.

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Alongside this, there are major regional differences across the country on how many workers receive overtime pay. Employees in Aberdeenshire are the most likely to receive overtime, with 28.8 per cent of workers qualifying, compared with just 9.6 per cent in Windsor and Maidenhead.

Kensington warned that many mortgage lenders may not count overtime payments when deciding whether to lend to borrowers, with the ONS data showing that overtime makes up 2.7 per cent of total average earnings.

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, head of mortgage business at Kensington, said: “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.”

ruth.gillbe@ft.com