To add to the above - I've looked at the figures again and the increase is closer to £400. They're asking me to pay almost triple what I am now.

Hi Shadow79,

Sorry to hear that you are finding things a little difficult with your payment and your Trust Deed.

Your payment towards your Trust Deed should always be based on affordability and you should be allowed to pay all of your reasonable living costs and bills. The amount that you have left over after all of this should be the amount that you pay per month and this should be fair and reasonable.

Any increase in salary an also bonuses must now also be taken into consideration under the legislation.

When it comes to calculating your payment we need to use something called the Common Financial Statement which sets maximum spending amount for things like Food / Housekeeping, Travel, Phone & Other Expenditure. In these 4 categories your spending can be capped at the maximum amount allowed unless you have a valid reason as to why you are spending more than the maximum guideline figures.

If you are living at home then I would assume that your costs are a lot less than what they would be if you were running your own house with all of the associated bills. On this basis I could understand if you have been asked to pay an increased payment.

When it comes to moving out of your parents then your expenditure will change and your payment should be adjusted accordingly to reflect this as you will have a lot more financial responsibility.

I would speak with Knightsbridge again about your budget and ask them to review this. If you feel that the payment is unaffordable and you can supply evidence of all of your expenditure and your spending does not exceed the maximum spending trigger figures then they should review and reduce your payment. You may wish to communicate in writing via email that way you can supply evidence of your expenditure and they can respond.

Communication is key in situations like this and sometimes it’s a good idea to perhaps sit down with an advisor in their office and go over things. I find that this approach works for me and my clients when there can be a difference in viewpoints.

A trust deed is based on affordability. I guess your outgoing a were drastically reduced after moving in with your parents and coupled with your alary increase it would be easy to see where the extra £300 would come in. Once you move again and do another Income and expenditure review as long as it's not a million miles away from where you were at the start I can't really see a huge problem.
Property equity might be a different matter but without knowing the details it's hard to say. For example if you wer to earn much more and move to a much bigger property I'm not sure how that would be viewed.
The fact a scheduled call back to do the income v expenditure again with the new property is a positive I think. Keep in touch with them and try not to worry too much. You shouldnt be any worse or better off on a monthly basis at the end of that process.

Your full surplus income has to be paid as your contribution so if you're earning more, you'll pay more.

Thanks for the responses. To clarify - I've only been back living with my parents since the end of April. It was only ever a 2-month temporary arrangement until I move into my new place as my landlord needed the property back before my new place was ready. Up until that point I had been living alone. And I have been giving my parents roughly the same as my previous outgoings as they've been helping me out month to month as I was already struggling.

It's the occasional outgoings over and above my bills that they often need to help me with. I'm now in a high profile role with irregular travel (often at short notice) so I need to cover some expenses upfront and claim them back. It's really difficult to be able to do that sort of thing when you're already on a shoestring budget. I can only say "no" to meetings so often before my employer questions my commitment.

David - can you expand on what's considered valid reasons for something costing more than the CFT recommendations? E.G. I'm looking at having to give up the exercise class I was able to take up after my salary increase because it's more expensive than what the CFT recommends. That may not seem like an essential expense, but it's been a lifeline for me in terms of general wellbeing and recovering from depression and anxiety.

Hi Shadow79,

It’s hard to give you advice without knowing a full breakdown of your income and expenditure to see what this is like.

It really depends on individual circumstances as to what is an acceptable over spend and what is not. Under the legislation the Trustee has the discretion to allow expenditure which is in excess of the trigger figures but evidence of why there is a breach in the trigger figures needs to be provided.

How much is your gym membership per month? If your overall spend in the “Other Expenditure” category which is where the gym membership falls exceeds the maximum amount allowed then you can be asked to reduce your other spending to compensate.

If you regularly travel with work then something you might want to consider is a credit card. You could apply and be accepted for a high interest card but as long as you are disciplined enough to clear this every month when you expenses come in then you shouldn’t run in to trouble.

As I and others have said your payment should always be based on affordability. Unfortunately if someone has a high income and their spending is capped at the maximum this can result in a high payment per month. Increases in income throughout the course of the Trust Deed is something that is hard to predict and sometimes in the short term you need to pay more but you will feel the benefit in the long term once you are free from the Trust Deed and have a higher income.

Have you been very thorough with your income and expenditure with Knightsbridge? If you are not thorough enough then things can be missed and this can lead to a strain on your budget and problems paying the amount. On the other hand if your spending is at the maximum amount already then it could be a budgeting issue for you and something that you would need to look at.

Thanks for getting back to me, David. The class costs £10 per session, once a week. I'm also looking at all of my outgoings to see what I'm missing and if I need to budget better. I hope I can sort it out next month when they review my income and expenditure. I'm fully prepared to pay substantially more now that I've had a salary increase. Just not an amount that leaves me worse off than before my increase.

I didn't think I would be able to apply for a credit card while in a TD. My Experian report suggests I wouldn't get one and it's something I'd rather avoid. I got into my current mess by trying to buy my way out of depression then trying to pay off cards with other cards. I've made a personal vow to not even consider getting one for a very long time even after the TD is finished!

Thanks, everyone, for the replies and advice. I'll post an update next month after I've reviewed things with them again.

This might seem like a silly question, hence my username!! If you pay in more would this not mean your TD may possibly end earlier than expected given you cannot be expected to pay more than the total debt plus fees? Thus if you have paid in an extra years contributions what effect did/does this have on the TD?

Hi silly,

No such thing as a silly question on the forum.

It comes down to how much debt shadow79 has and how much extra funds have been ingathered. In my experience an extra years worth of money being paid in is unlikely to result in the total amount being paid back plus interest and costs.

Shadow79 - how much debt did you enter the Trust Deed with?

@David - my total was just under £25k. I added up what I've paid for the past 2 years, the increased contribution plus (optimistically) half of my bonuses for the next 2 years and it comes to about £200 or so under the full debt amount. So I won't have overpaid my original debt. ETA: I don't own a property. I do have a car, but will confirm what interest they may have in it at the end. It's a few years old and a pretty basic model to get me from A to B, so I'm hoping it won't extend the deed too much.

@Silly - I wish the increased payments would bring it to an end sooner! It would be nice to be able to plan ahead.

I got my letter through today breaking down how they calculated the payments and they'd left off my student loan repayment. Going to call tomorrow to let them know, as I have the old-style loans which aren't deducted from your salary. Taking it into account makes the increase a lot more affordable!

Hi Shadow79,

That all makes sense and thanks for going into a bit more detail.

It won’t help now but was a Debt Arrangement Scheme explored and explained to you? If you are within £200 of paying yours debts off in full then this might have been an option but it would depend on your circumstances at the time you signed the Trust Deed. The pay rise and bonuses might not have been foreseen at the outset so therefore without this you might not have come close to repayment in full.

It's good to hear you have received a breakdown of how they have calculated your budget. Sometimes seeing in in front of you helps rather than trying to discuss it on the phone.

In relation to your car, what do you think the value of it is now and what was the agreement at the start of the Trust Deed regarding the vehicle? If it’s worth less than £3,000 then there should be no issues or any extension. Don’t want until the end of your Trust Deed to clarify it, ask about it now.

@David based on my salary at the time, the person I spoke to about the TD said it wouldn't have been a good option. I didn't think I'd ever get anything more than inflation pay rises for the next few years but I've been incredibly lucky.

Long term it'll be a good thing for me. Now I've got used to budgeting and the payment to my TD not being mine to spend, when it's all finished I'll be able to start saving and not have to rely on revolving credit every month.

I spoke to Knightsbridge today and sorted out my revised payments. Feels as if a weight has been lifted!

ETA: I forgot to ask about the situation with my car. I'll have to give them a call as it was valued just under £7K when I took out the deed.