Student Loan and investments

FezJez

Hi, I am trying to advise my son who is just starting university in London and taking out a student loan. He is also lucky enough to have some investments in the form of an ISA and a trust which cannot be accessed for another 6 years. My question is, if after graduating he takes a job at 25K pa, just under the current repayment threshold will any withdrawals from his investment count as income and have a 9% charge towards paying off his student loan? Does it make a difference what the withdrawals are for (e.g. a mortgage deposit)?

MSE_ForumTeam5

We've moved this to the relevant part of the forum

Ed-1

FezJez said:

Hi, I am trying to advise my son who is just starting university in London and taking out a student loan. He is also lucky enough to have some investments in the form of an ISA and a trust which cannot be accessed for another 6 years. My question is, if after graduating he takes a job at 25K pa, just under the current repayment threshold will any withdrawals from his investment count as income and have a 9% charge towards paying off his student loan? Does it make a difference what the withdrawals are for (e.g. a mortgage deposit)?

Generally only earned income which is subject to National Insurance is counted for student loan deductions.

Some other unearned income is counted if the graduate is in self-assessment but withdrawals from savings certainly don't count as income.

FezJez

That's good to know. Thanks Ed-1.