Student Loan Level 1 and paying into workplace pension

Liswin35

Hi

This is my first post here.  I recently had a wage rise which takes me over the threshold to start paying off my student loan (I graduated 2012) If I start contributing to my workplace pension my employers will also match what I pay in x 3.  If I do this, will this therefore take me below the threshold whereby I will not have to pay my student loan or does it not make a difference?

Please explain in laymans terms if possible,  I am rubbish with finance.  Thank you   

Albermarle

If I start contributing to my workplace pension my employers will also match what I pay in x 3. 

Regardless of the student loan issue, by not contributing to your workplace pension, you are throwing away free money from your employer . The 3X is much more generous than most schemes , so you really should be taking full advantage of it.

OldBeanz

Pension contributions do not affect the threshold for Student Loans unless they are paid by Salary Sacrifice.

biscan25

Liswin35 said:

Hi

This is my first post here.  I recently had a wage rise which takes me over the threshold to start paying off my student loan (I graduated 2012) If I start contributing to my workplace pension my employers will also match what I pay in x 3.  If I do this, will this therefore take me below the threshold whereby I will not have to pay my student loan or does it not make a difference?

Please explain in laymans terms if possible,  I am rubbish with finance.  Thank you   

Albermarle's comment aside, which I wholeheartly agree with, the details are as follows.

The threshold for repayment is £20,184. You'll pay 9% of anything in excess of this. e.g. if you earn 25k, these amounts to £433 a year.

You can only reduce this if you make pension contributions by salary sacrifice. Pension contributions by other means won't cut it.
Salary sacrifice is where you give up some of your salary, which your employer contributes to the pension fund on your behalf.
You'll have to ask them whether they offer this. Most do (except public sector), since it saves them (and you!) some national insurance.