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Student loan repayments and pension income

jonboysez
Posts: 70 Forumite


Hi
I can't seem to find an answer to this question anywhere - I'm thinking of buying an annuity shortly with my personal pension fund - taking max cash lump sum then monthly income til I die. I have an old style (Mortgage style) student loan that I have continuously deferred (through low wage), but at some point in the future, if the monthly annuity income has to be included when applying for deferment of loan, it might bring me over the threshold. Does this income have to be included in my total income for loan deferment purposes? I phoned the SL company and was told by someone (who was very vague on the subject) that if its taxable income (which it will be) then it has to be included, but elsewhere I have read its only based on whether National Insurance is paid on it (which it wont be). Which is correct? I only have 5 years to go till I'm 60 and it will be written off if not paid.
I can't seem to find an answer to this question anywhere - I'm thinking of buying an annuity shortly with my personal pension fund - taking max cash lump sum then monthly income til I die. I have an old style (Mortgage style) student loan that I have continuously deferred (through low wage), but at some point in the future, if the monthly annuity income has to be included when applying for deferment of loan, it might bring me over the threshold. Does this income have to be included in my total income for loan deferment purposes? I phoned the SL company and was told by someone (who was very vague on the subject) that if its taxable income (which it will be) then it has to be included, but elsewhere I have read its only based on whether National Insurance is paid on it (which it wont be). Which is correct? I only have 5 years to go till I'm 60 and it will be written off if not paid.
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Comments
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I don't know the answer but am interested in the outcome.0
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amanthapeterson wrote: »As far as I am concerned I do not feel it safe for One reason student loans are so threatening as they are hard to shed. Once a federal student loan has gone into default, the federal government can withhold your tax refund. I may be wrong but all I know about i I do not find it helpful at all.
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Further to my original query - the loan deferment form does not include a section to enter any pension income or details of what evidence to provide to back it up - there is a catchall box that requires you to state any war pension received but states that it won't be taken into account when accessing your total income for deferment purposes - this also makes me query why pension income should be included, but then again my circumstances might be fairly unique, I was a mature student when I took out the loan and have not had large wages since!0
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Are you able to find a copy of the deferment letter online? Just so we can see it and the exact wording used.
I think you will be liable for payments as pension is still taxable income, just not earned income. I believe student loans work from taxable income.
It does say here "If you are living off unearned income..." and then "....confirming that the level of support is less than the current deferment threshold;"
http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3867045&_dad=portal&_schema=PORTAL0 -
You could ask the same question about other kinds of non-employment income, or indeed capital.
If a business owner pays himself in dividends rather than a salary, does that trigger a loan repayment deduction?This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Clifford_Pope wrote: »You could ask the same question about other kinds of non-employment income, or indeed capital.
If a business owner pays himself in dividends rather than a salary, does that trigger a loan repayment deduction?
Yes, nowhere does it make it clear whether repayments should be made from Earned Income or Taxable Income.0 -
Here is the blank application for deferment form - there is a difference between the old style mortgage type loans and the newer income contingent type loans - the latter have their repayments collected through PAYE, whereas I have to supply direct debit details to my bank in advance of any payments to be taken.
http://www.ccscollect.co.uk/docs/SLC/20130901%20-%20Deferment%20form%2009-13%20(CCS%20Style).pdf0 -
amanthapeterson wrote: »As far as I am concerned I do not feel it safe for One reason student loans are so threatening as they are hard to shed. Once a federal student loan has gone into default, the federal government can withhold your tax refund. I may be wrong but all I know about i I do not find it helpful at all.
What does this mean?
Perhaps you could translate.0 -
You are signing to say there is no other income than that disclosed so in that respect it looks like you must disclose any pension received.0
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