impact of savings interest on student loan

sailorgirl_50

Hi

in very fortunate position that due to an inheritance have earned about £3k of savings interest last year (not in an ISA)

But am i right in saying this will be counted as unearned income for student loan purposes ?

Do i have to do a self assessment or will this automatically be covered through my student loan deductions by PAYE?

thanks

Kim_13

In your situation I would be getting the sum into ISAs as quickly as possible, and you could put it into Premium Bonds in the interim as these are also not taxable.

As HMRC adjust tax codes to collect tax due on savings interest earned in prior years, I would expect them to do the same for Student Loan Payments.

As far as I'm aware more than £2,000 unearned income is only an issue IF you are required to Self Assess (in that it is an all or nothing threshold, £2,000 would be disregarded but £2,001 means a £180 bill as 9% is due on the whole amount.) Being over the threshold doesn't mean you have to submit a SA; £10,000 taxable interest is the Self Assessment trigger.

sailorgirl_50

thanks for replying !

fuzzzzy

I have been trying to get my head around all things student loan related myself lately and finding conflicting information online.

You may get more responses in future to any student loan related questions in the student money saving forum.

https://forums.moneysavingexpert.com/categories/student-money-saving