Salary sacrifice and student loans

swindiff

I did try this in the loans forum but its getting no response. Does not really fit neatly in an one forum, loans, budgeting or pensions so apologies for reposting.

My step-son wants to go to university next year so will be taking out a student loan. My understanding is that he can get a Student Loan for the full amount of the course, £9250/year.

However, he will need to live so will be getting a student maintenance loan as well as a part time job so that he can pay for accommodation and living expenses. This is known as a "maintenance loan for living costs" and how much he can get will depend on our household income.

I earn just over £40k/year and my wife just under £20k/year. If I put £60k into the online calculator it says he would be entitled to a maintenance loan of £4331/year. However I notice that the criteria is taxable household income.

I salary sacrifice for my pension down to £27k/year so is it legitimate for me to put this figure into the calculator making out household taxable income £47k? This would increase the maintenance loan he was entitled to upto £5954/year. This should just about pay for his accommodation.

https://www.gov.uk/student-finance-calculator

agrinnall

You might get an answer here, but really the best board for it is the Student one, where people who understand the ins and outs of the student loan system most often post.

Linton

Salary sacrifice means that your real gross income drops and your employers contribution to your pension scheme increases accordingly. It would be incorrect to include any of your employers pension contribution, whether it comes from salary sacrifice or not, in your statement of your income.

swindiff

What's your annual household income?
This is your parents’ or partner’s taxable income plus your own. It affects how much help you'll get with living costs.

It asks though for taxable income. If I salary sacrifice from £40k down to £27k then isn't my taxable income £27k?

Linton

swindiff wrote: »

What's your annual household income?
This is your parents’ or partner’s taxable income plus your own. It affects how much help you'll get with living costs.

It asks though for taxable income. If I salary sacrifice from £40k down to £27k then isn't my taxable income £27k?

Yes, which is what I said. Employers pension contributions are not part of your taxable income.

swindiff

OK that's good then, cheers