Student loan repayment and retirement income - how do they work together / impact on each other?

PJsRgreat

Hello Forum members
I've just completed my university studies, and my student loan becomes repayable in April 2026.
My first question - does my private pension count as income for the purposes of repayment threshold payments, please?
BTW - I'm in my late 50s and receive monthly pension payments, which are currently below the repayment threshold for Plan 2.
My second question - when I reach state pension age will my state pension be classed as income for the purposes of student loan repayments, please?
N.B. I think private and state pensions might be classed as income, but as most students are late teens/early 20s, private pensions and state pensions don't appear to be covered when discussing repayment of student loans on the MSE advice pages (which I understand completely), but this gap leaves me with questions and uncertainty.
I'd be grateful for any advice, please.
Thank you.

silvercar

My understanding is that pension income is income and would be included.

It does depend on whether your income streams cross the repayment threshold individually. Individual pensions below the repayment threshold wouldn't trigger a loan repayment. The only time the total annual income is considered for student loans is if you have to do a tax return. Otherwise total annual income is not taken into account at all.

Presumably you will let the loan run, rather than decide to make voluntary repayments. 

Ed-1

silvercar said:

My understanding is that pension income is income and would be included.

It does depend on whether your income streams cross the repayment threshold individually. Individual pensions below the repayment threshold wouldn't trigger a loan repayment. The only time the total annual income is considered for student loans is if you have to do a tax return. Otherwise total annual income is not taken into account at all.

Presumably you will let the loan run, rather than decide to make voluntary repayments. 

Pensions are not subject to National Insurance contributions; therefore are not within scope of student loan repayments.

Student loan repayments "income" as a general rule is classed as "NICable income".

silvercar

Ed-1 said:

silvercar said:

My understanding is that pension income is income and would be included.

It does depend on whether your income streams cross the repayment threshold individually. Individual pensions below the repayment threshold wouldn't trigger a loan repayment. The only time the total annual income is considered for student loans is if you have to do a tax return. Otherwise total annual income is not taken into account at all.

Presumably you will let the loan run, rather than decide to make voluntary repayments. 

Pensions are not subject to National Insurance contributions; therefore are not within scope of student loan repayments.

Student loan repayments "income" as a general rule is classed as "NICable income".

This article seems to suggest otherwise:

https://www.thisismoney.co.uk/money/studentfinance/article-13689557/I-attended-university-mature-student-repay-loan-retirement.html#:~:text='The%20only%20time%20an%20occupational,loan%20early%2C%20before%20your%20retirement.

in fact you said the same in this thread: https://forums.moneysavingexpert.com/discussion/6276774/how-is-pension-income-treated-when-repaying-a-student-loan

Ed-1

silvercar said:

Ed-1 said:

silvercar said:

My understanding is that pension income is income and would be included.

It does depend on whether your income streams cross the repayment threshold individually. Individual pensions below the repayment threshold wouldn't trigger a loan repayment. The only time the total annual income is considered for student loans is if you have to do a tax return. Otherwise total annual income is not taken into account at all.

Presumably you will let the loan run, rather than decide to make voluntary repayments. 

Pensions are not subject to National Insurance contributions; therefore are not within scope of student loan repayments.

Student loan repayments "income" as a general rule is classed as "NICable income".

This article seems to suggest otherwise:

https://www.thisismoney.co.uk/money/studentfinance/article-13689557/I-attended-university-mature-student-repay-loan-retirement.html#:~:text='The%20only%20time%20an%20occupational,loan%20early%2C%20before%20your%20retirement.

in fact you said the same in this thread: https://forums.moneysavingexpert.com/discussion/6276774/how-is-pension-income-treated-when-repaying-a-student-loan

Yes, they count as "unearned income" but only for those who otherwise have to fill in a tax return and only if total unearned income is over £2,000.

If you are not in self-assessment, no repayment is due on pension income.

LITRG

Hello, we cover the student loan repayment rules in some depth in our guidance. Hope it is helpful: https://www.litrg.org.uk/tax-nic/student-finance-and-tax-system/student-loan-repayments