Student Loan & Pension

Hi all

I retrained as a teacher in my early 50s following redundancy from my previous career & have a student loan which covered fees & living expenses for 1 year. I have paid a tiny amount off it as my pay thus far has only briefly topped the minimum level. However, I am now facing something of a problem.

My health has taken a significant downturn in recent months & I have swapped classroom working (my contract had ended anyway) for a different, less physically demanding teaching job. This is lower paid through supply & is therefore, to all intents & purposes, a zero hours contract. I am earning around 25% less than I was, with no prospect of the incremental rises I would have got in a mainstream teaching role unless (unlikely) my health improves & I can return to a 'normal' teaching job.

I have a private pension pot which I can access in August and am applying for PIP (I'd rate my chances at 50:50). Ideally, I hope to be able to carry on working past 55 in some form or another, but I will never earn enough to repay a penny. If my health deteriorates any further, I will probably be forced to stop working altogether.

I'm now worried that, having a reasonably healthy pension (I'll be OK but won't be sipping cocktails in the Bahamas off it) to draw on, but one that needs to last me for however many years I live for, can any pressure be applied to me to make repayments out of that pot? If I aren't working at all, I would draw in the region of £750 pcm to meet my living expenses & plan to use my cash free element (25%) of the pot to clear my mortgage & other minor debts.

I hope that makes sense...sorry if it's a bit waffly!

Comments

  • If that pension is your only income, it would only add up to £9K or thereabouts per year, so you should be under the repayment threshold and won't need to make repayments. Depending on the year you took out your loan, it might then be written off at 60. You'll need to check the applicable age and threshold for the academic year your loan started.

    I used to be Starrystarrynight on MSE, before a log in technical glitch!
  • Ed-1
    Ed-1 Posts: 3,867
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    Pension income is not subject to National Insurance contributions. Therefore it is also not subject to student loan repayments (as student loan repayments is only on NICable income).
  • Thanks for the reply - much appreciated. I took the loan out in 2016 & qualified in 2017. I'm currently working as a supply teacher & earn (pro rata as I don't get paid for holidays) around £19K pa. I started to worry as I came across what seemed to be examples of the loans being handed to debt collection companies.


    I won't draw on the pot as income (only the 25% lump sum with which I plan to pay off my mortgage, etc.) as long as I'm able to keep working, so it would only become a source of income as earned income drops/ends.


    I have an application in for PIP, yet to be determined.


    The next change in income would be in 2031 when I'd be eligible for state pension at 67.


    Thanks again for replying.
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