Yes, it is possible to apply for student finance through Student Finance England (SFE) and decline the loan if you do not need it. When you apply for student finance, you will have the option to choose how much loan you want to take out. If you do not want to take the full amount or any loan at all, you can choose to decline the loan.
It's also true that some universities offer grants and scholarships based on household income, and they may require you to provide evidence of your household income through SFE. By applying for student finance, you will automatically be assessed for any grants and bursaries that you may be eligible for from your university or other organizations.
Keep in mind that you will need to apply for student finance every year that you are in university, and your financial situation may change from year to year. If you have any questions or concerns about student finance, it's always best to contact SFE or your university's financial aid office for advice and guidance.