Student Loan 2015 Discussion

tyllwyd

There are already arrangements for students who take out loans under the current system to pay them back if they move abroad, so I imagine it will be very similar for 2012 loans.

IsItMe_2

Referring to family/student-loans-tuition-fees-changes#17
Equivalent 'marginal' (1) tax rates for graduates under 2012 system
Assumes current tax thresholds remain

If I have understood Martin’s table correctly then at
Annual Salary of £21,000
the tax take is £8,610
means that the annual take home pay is £12,390
therefore monthly pay is £1,032.50

[Note I have made no allowances for inflation or anything else]

I did this in an EXCEL spreadsheet using £1000 increments

...N...........(N*0.41)......N.–.(N*0.41).......(N – (N*0.41))/12

Annual.........Tax...........Annual Take..............Monthly
Salary.............................Home Pay....................Pay

21,000............8,610..........12,390....................1,032.50
30,000..........12,300..........17,700....................1,475.00
40,000..........16,400..........23,600....................1,966.67
42,474..........17,414..........25,059....................2,088.31

...N...........(N*0.51)......N.–.(N*0.51).......(N – (N*0.51))/12

42,475.........21,662...........20,812...................1734.40
51,000.........26,010...........24,990...................2,082.50
60,000.........30,600...........29,400...................2,450.00
70,000.........35,700...........34,300...................2,858.33
80,000.........40,800...........39,200...................3,266.67
90,000.........45,900...........44,100...................3,675.00
100,000.......51,000...........49,000...................4,083.33

See what happens at the break point of £42,474 / £42,475
You need to be earning £51,000 to match the monthly pay of £2,088

Are all these figures correct ?

The “you don’t start paying until you are earning £21,000” is IMHO a complete red herring. How many graduates will be getting mortgages; on these figures [if they’re right] many won’t be able to live an independent life at all.

Is it me ?

Lokolo

Your figures are all wrong.

You pay 9% OVER £21,000. Not 9% OF £21,000.

So if you earn £22,000, you pay 9% of £1,000 a year (£22,000 - £21,000). So are paying back £90 a year.

Your figures also don't take personal allowance into consideration it seems.

JimmyTheWig

rollomcfluff wrote: »

I imagine that a marginal rate of 51% (after just £42kpa salary) might be a strong incentive to leave the country - (61% after £150kpa even more so). Is a braindrain likely to be the next unintended consequence of this policy?

That's nothing compared to the 73% marginal rate that lower earners pay.

crawford43

I have just read this guide having just read the Direct.gov guide and I am confused over the maintenance gratnts and loans, the moneysavingexpert guide lumps the two together to get a maximum available amount but Direct.gov doesnt. for example the maximum listed available loan amount for a student in London is 7675 but in the moneysaving table that would be reduced if you werent eligible for a grant. unless I have misunderstood both guides cannot be correct

Turnbull2000

Been in touch with the SLC and discovered I'm down to £225, so notice is being sent to Inland Revenue to stop deductions from my payslip.

But am I right in thinking that my £110 deductions are from gross pay, therefore I'll only gain £70 per month once the deductions stop due to tax?

JimmyTheWig

Turnbull2000 wrote: »

Been in touch with the SLC and discovered I'm down to £225, so notice is being sent to Inland Revenue to stop deductions from my payslip.

But am I right in thinking that my £110 deductions are from gross pay, therefore I'll only gain £70 per month once the deductions stop due to tax?

My gut instinct says that you are wrong, but I don't know for certain as it was all different when I was paying mine off years ago.

atypical

Turnbull2000 wrote: »

Been in touch with the SLC and discovered I'm down to £225, so notice is being sent to Inland Revenue to stop deductions from my payslip.

To be pedantic, Inland Revenue ceased to exist in 2005. It's now HMRC.

Turnbull2000 wrote: »

But am I right in thinking that my £110 deductions are from gross pay, therefore I'll only gain £70 per month once the deductions stop due to tax?

No. The deductions are taken from net pay.

gadgetmind

rollomcfluff wrote: »

61% after £150kpa even more so

It's worse than that. You hit over 60% at just over £100k due to 40% tax, 2% NI and losing £1 of personal allowance for every £2 you're over. You can easily end up with NO personal allowance.

Add on 9% student loan repayment on a loan with an interest rate of RPI + 6%, and I think you'll find that diminishing returns will apply as the UK's high fliers will simple fly.

milkorplain

Clear and concise for a parent of a soon-to-be-a-student son. Awaiting with interest govt. decisions on early repayment. Will penalties be designed to prevent wealthy-background people from getting an advantage (when left a legacy by an elderly aunt) OR are they to make sure that the loan companies do not lose out?