Student Loan rate for 08-09

CLAPTON

moneybelle wrote: »

:beer:
I know that! Maybe others don't so thats why I put it there!

Some people may already have a full ISA allowance.

Most other (non ISA)accounts do take off tax so 4.75% gross interest on an ordinary account will only return interest at 3.80% which matches the projected student loan rate next year. As long as your account yields more than 4.75% before tax, which is possible, it should be ok. But if interest rates drop, the margins may be slim.

6% gross interest become 4.8% net, which was the student loan rate this year from what I have seen posted. So it seems you really need high interest accounts to make it work if you cannot use an ISA.

My point of view is whether it is worth holding a student loan if you do not require one. i.e. Holding the loan in an accountto make more money from the interest than what you will be charged for.

If there are other non-taxed accounts with higher interest than the loan rate, apart from an ISA, please tell me. E.g. especially for poor students who are not earning but living off parents money.

If you are not earning (or are earning less than 5435 (2008-9) then you do not need to pay tax on savings' interest.. you can get the interest tax free by filling in a R85 for each a/c and you can claim last years tax back from the HMRC

Randomtask_3

Hi. This is really helpful stuff here. It's pathetic that the Student Loans Company won't release these figures until after you've taken the loan. Last year I got a statement on Aug 30th informing me that the interest would be 2.4%, and then one on Aug 31st, with the doubled interest rate on it! People only (in general!) get student loans because they need them, so should be entitled to clarity with these facts. It says something when you have to turn to a random forum, searched for on Google, in order to get information about a state financial service...!
Your advice is sound CLAPTON - thanks. There isn't (technically) any tax free savings except for ISAs, but you're best to use R85s as soon as you can to make sure that you get the compound element. Interest earned on savings is mapped on student loan assessments I think.
Also, if anyone has confirmation on the rate for 08/09 student loans then please post...