How is pension income treated when repaying a student loan.
Alice_Holt
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I'm considering a part time OU degree, and thinking of applying for a student loan to cover tuition fees.
I shall be in receipt of pension income (not earnings) when repayment of the Student Loan starts.
My understanding is:
1) The student loan repayment will start 4 years after I first enrol on the course;
2) Repayments will be calculated at 9% on taxable income over £27,295;
3) Pension income and taxable interest and investment income are taken into account in full as income;
4) Cash ISA's and other non-taxable interest / investment income are not included in the income calculation.
Can anyone confirm this, and / or provide a link that explains how pension and investment income are treated when repaying the loan.
I cannot find this information in the online SL information / documentation.
TIA.
I shall be in receipt of pension income (not earnings) when repayment of the Student Loan starts.
My understanding is:
1) The student loan repayment will start 4 years after I first enrol on the course;
2) Repayments will be calculated at 9% on taxable income over £27,295;
3) Pension income and taxable interest and investment income are taken into account in full as income;
4) Cash ISA's and other non-taxable interest / investment income are not included in the income calculation.
Can anyone confirm this, and / or provide a link that explains how pension and investment income are treated when repaying the loan.
I cannot find this information in the online SL information / documentation.
TIA.
Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.
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Pensions that you receive are not counted as earned income but as unearned income so may affect the amount you are required to pay back on your student loan if you complete a tax return.
https://www.litrg.org.uk/tax-guides/students/student-loans/plan-2-student-loans/i-am-employee-how-do-i-make-plan-2-student
In a nutshell, only income that is subject to National Insurance is relevant for student loan repayments. Unearned income is only counted if you are in self assessment and only then if it is over £2000.