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Student Loan/Grant "Loophole"?
NottinghamDad
Posts: 10 Forumite
Hi
I think I have found a good way to save money for my children but wondered if anyone could shoot me down before I do this.
I have been saving in ISAs for years and have a tidy sum put away. We also have 3 children about to go to university who I am sure will eat into it in a big way.
I have been looking at student finance and it appears as though the grant they are eligible for does not have to be repaid but depends on my income. Based on my income of about £35k after tax they qualify for about £1000 each per year as a grant.
However if my income was only £25k they would each qualify for a grant of over £3000 per year. My understanding is that if I paid £10k into a pension SIPP each year they are at university it would bring my taxable income down to £25k and increase their grants. We can't afford ordinarily to do this but we could if we started spending our ISAs to compensate. It is basically transferring our ISAs into a SIPP. I would get tax relief on the contribution to the SIPP and could then start taking the money back from the SIPP once the children have finished University. With 3 children averaging 3 years each at Uni it means they get £27k in non-repayable grants as opposed to £9k between them.
Is this ok/legal/doable.
I think I have found a good way to save money for my children but wondered if anyone could shoot me down before I do this.
I have been saving in ISAs for years and have a tidy sum put away. We also have 3 children about to go to university who I am sure will eat into it in a big way.
I have been looking at student finance and it appears as though the grant they are eligible for does not have to be repaid but depends on my income. Based on my income of about £35k after tax they qualify for about £1000 each per year as a grant.
However if my income was only £25k they would each qualify for a grant of over £3000 per year. My understanding is that if I paid £10k into a pension SIPP each year they are at university it would bring my taxable income down to £25k and increase their grants. We can't afford ordinarily to do this but we could if we started spending our ISAs to compensate. It is basically transferring our ISAs into a SIPP. I would get tax relief on the contribution to the SIPP and could then start taking the money back from the SIPP once the children have finished University. With 3 children averaging 3 years each at Uni it means they get £27k in non-repayable grants as opposed to £9k between them.
Is this ok/legal/doable.
0
Comments
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https://forums.moneysavingexpert.com/discussion/comment/65649943#Comment_65649943
Your duplicate thread.
Do you have a partner? Do they work?0 -
We are a couple with only one income.
Sorry for the duplicate posting but I wasn't sure where to place it as I am very new to these forums.0
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