Help With Student Loans - HERE!

cobson

Am I right in thinking that when applying for student finance and giving details of parents income, the 25% tax free lump sum from a pension doesn't need to be declared ?

cobson

When applying for student finance, and giving details of parents income, how are the pension payments of those who are on relief at source occupational pension schemes taken into account ?  
Those who have net pay occupational pension schemes have their pension contributions taken before tax, so their P60 will show a taxable income lower than their gross income and according to SFE they are allowed to give this lower figure, which takes their pension contributions out of their assessed income.  
Likewise, those who are using AVCs or private pension schemes have boxes on the form where they can enter their contributions to have them discounted from their income.
But those who are on relief at source occupational pension schemes, where contributions are made after tax and the pension scheme claims the tax back, have no place on the form to give their pension contribution details.  Their P60s just show their gross income - their is no lower taxable income figure that they can quote.
Surely they should be treated the same as those on other types of pension schemes and have their contributions taken into account ?

Catch1964

My brother has offered to pay my sons accommodation fees £6.5k for university each year . But having read some of Martin’s advice it’s worth taking the tuition and Maintenance loan ( he will be 5.5k maintenance loan) and using the other for cost of living as he may never pay back the loan. Any thoughts please. Thank you 
catriona 

Mrcnghtn

Is this forum no longer being monitored?

Savvy_Sue

None of the boards are formally 'monitored'. 

I've read the last couple of posts, but don't feel I have anything useful to say. For cobson, reading the notes which go with the applications should indicate how pensions are treated, and it's a long time since I had to do that. And Catch has looked at Martin's advice, it's hard to better that. 

Looking back to your query, SFSLExpert has no special standing and hasn't been on the forum since 8th January. It has to be your son's call whether or not he repays his student loan early but I stand by what I said before: your son should read Martin's articles and make his own mind up. FWIW, if one of mine ever ASKED me, I'd suggest NOT repaying early, simply because it seems to me that now more than ever job security is a thing we used to enjoy, but no longer. But I have even less standing than SFSLExpert and you don't know me from the milkman ... 

angei010

Hi
i am on plan 1 student loans and it should stop when I am 65 which is 2 weeks into November this year.

when do my payroll stop taking money from my pay and are they advised to do so the month before please.

Savvy_Sue

As someone who sees HMRC's notifications about stopping or starting student loan repayments, I'm afraid I can't say. Earlier this year, I had fortnightly notifications to start someone's SL1 deductions, which were already happening, so the system isn't without its glitches.

When notifications arrive they are usually actionable from the next payroll run so I wouldn't expect to have any prior notice. 

[Deleted User]

Mrcnghtn said:

Thanks Savvy_Sue. Grateful for SFSLExpert’s comments please?

@Mrcnghtn apologies! I normally get alerts when posts are made, must've switched them off at some point.

I'd have to echo @Savvy_Sue's warning.

I can't and won't advise you on whether it is 'better' to part with money on a voluntary basis, but I will clarify Savvy's comments further by saying that SL repayments are based on set affordability guided by the Government's (DfE) analysis on the economy each year.

Assuming your son first started a 3 year degree in 2012/13 (based on what you say his fees were each year) he will have a 'Plan 2' loan. 

A very crude, basic calculation based on the info you've supplied is (Weekly/Monthly Salary - Weekly/Monthly) Threshold x 9% = Mandatory Repayment - the relevant threshold is determined by how frequently your son would be paid.
An £80,000 salary, is equivalent to £1,538.46 weekly or £6,666.66 monthly. The respective thresholds are £511 or £2,214.

That means either:

(1538.46-511)*9%= repayments of £92 per week or, (6666.66-2214)*9%= repayments of £400 per month.

Of course you'd need to factor the appropriate interest rates into the equation but the capital of a £30k loan would be repaid in around 6 years based on repayments of £400 per month - but even with interest he'd very likely be loan free in around maybe 8 - 10 years, I think (roughly)

As Savvy says, if things go awry during that period though, personally I'd be more relaxed knowing I had savings of £30k to fall back on and that I wouldn't be paying my student loan because I don't earn enough, or at least my repayments would decreass to reflect the deop in income, than think that I'd paid that £30k into my loan balance just for the sake of saving myself £400 per month on repayments in the relative short term.

Just remember! If you make ANY voluntary repayment to your loan balance, you can't ask for it back later.

A lot of numbers to band about, but hope it helps a bit at least

cobson

Savvy_Sue said:

For cobson, reading the notes which go with the applications should indicate how pensions are treated....

Unfortunately the notes are no help - it is as if SFE think that all occupational pensions are of the net pay type and don't know that relief at source pensions exist....

paulsvan

Hi,
I have a historic Student Loan, taken out in 1993. I only completed one year of study at Coventry University due to a family members terminal illness and until recently assumed the loan had been paid off through my earnings.

I found out 2 years ago I still had a (small) outstanding balance so when I changed job I asked the payroll department to attempt to catch up on these payment with The Student Loans Company, unaware that my debt was now owned by Erudio.

Since that day I have been paying HMRC via my employer but am struggling to find out where my money has gone and how to a) stop the payments (my employer says by law they cannot), b) claim the money back and c) pay Erudio and clear the debt.
*I am also aware that debts may be written off but unsure if mine is eligible.

Can anyone advise?