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Martin Lewis: Five things all new English university starters should know
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MSE_Eesha
Posts: 162 MSE Staff


This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.
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Martin Lewis: Five things all new English university starters should know
I get a bit confused here, but...In point 3: "Instead, in practice what happens is you effectively pay an extra 9% tax on your income (not including national insurance) for 40 years."If you are only paying back 9% of your income above 25,000, rather than 9% from the top of your tax threshold, is the effective rate a bit less than 9%?
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Are you on about this article?
https://www.moneysavingexpert.com/students/student-loans-england-plan-5/
So if you earn £26,000 a year a an example, 9% of the bit over the threshold (£1,000) is £90, as per the example on that page. Are you overthinking this?
Income tax banding are irrelevant.0 -
I followed 'More V' to Martins Blog, then the 1st item.That has the title: "Martin Lewis: Five things all new English university starters should know"I agree completely with how you arrive at 90 for the 9% of 1,000.The text in the blog is "Instead, in practice what happens is you effectively pay an extra 9% tax on your income".When my income is 26,000 then 13,250 is above the 12,750 threshold.If I am to pay "an extra 9% tax on [my] income" then 9% of 13,250 is 1,192.50.It seems to me that the effective extra tax rate is less than 9% on my income.
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