Household income and whether pension contributions are included

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Stephen Flavell
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Hi,
student finance have queried my pensions contribution declaration in my parents' income assessment.

My understanding, when reading the form, was that pension contributions would not be included in the household income. I am PAYE and my pension contributions are from my salary into a money purchase scheme. However student finance's response was "We can't accept this as evidence of your private pension contributions in the 2015/16 tax year. Your evidence shows that these pension contributions were made through your employer. You have already received tax relief on these so we can't deduct them from your household income."

Having read through the documentation it is not clear if pension contributions should be included in the household income or not and if so, what constitutes a pension contribution which is or isn't including in household income.

Can anyone explain please.
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Stuart SFE
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(Original post by Stephen Flavell)
Hi,
student finance have queried my pensions contribution declaration in my parents' income assessment.

My understanding, when reading the form, was that pension contributions would not be included in the household income. I am PAYE and my pension contributions are from my salary into a money purchase scheme. However student finance's response was "We can't accept this as evidence of your private pension contributions in the 2015/16 tax year. Your evidence shows that these pension contributions were made through your employer. You have already received tax relief on these so we can't deduct them from your household income."

Having read through the documentation it is not clear if pension contributions should be included in the household income or not and if so, what constitutes a pension contribution which is or isn't including in household income.

Can anyone explain please.
Hi Stephen,

The majority of employee schemes have the tax relief and deduction from the gross income calculated by the employer at source. This is often reflected in the payslips which will show a difference between Gross/Pensionable pay and Taxable pay.

Taxable pay is usually lower and this is the figure that we would use in the financial assessment.

In this scenario, the deduction has already been made. We can't deduct the same figure twice.

For a Private or Personal pension where you pay regular payments to the pension provider which don't reflect in your payslip we can take these into account as an income deduction for assessment of household income.

We will require evidence of payments made, which can be in the form of a Tax Return or a statement from your pension provider.

In this scenario, once the evidence of payments made is received we would deduct the figure from the household income.

Regards,

Stuart
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Tom81
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As a (step)parent of a young person applying for student finance, can I point out that this can be very, very, misleading- many employers will have a figure on the P60 which does not take account of deductions taken for company pension- the deduction has not been made from the figure given as "gross income".
I'm sure many parents and young people will be entering this "gross" figure as their income, not realizing that they need to go back through their payslips and take off the pension contributions that have come out of their salary each month.
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camporojo
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Now I'm confused. SFE in this thread claim to use taxable pay i.e. the lower figure in the financial assessment, but the form asks you to submit gross figures.
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Graeme SFE
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Hi,

We almost always ask for the gross figure. However, if private pension contributions are involved, we can accept the net figure.

Warm regards,
Graeme
(Original post by camporojo)
Now I'm confused. SFE in this thread claim to use taxable pay i.e. the lower figure in the financial assessment, but the form asks you to submit gross figures.
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