How Student Loan Repayments hike up your Marginal Rate of Income Tax

You might naturally think that the UK's highest marginal income tax rate is 45%, but unfortunately, you would be wrong. One of the reasons that your marginal tax rate may be much higher than you thought is down to repaying student loans.

The repayment rules differ depending on whether your course started before or after 1st September 2012, so I outline the main differences in this video.

Depending on your salary, you could be paying up to a 77% marginal tax rate – and that’s before taking into account interactions with the benefit system, including the High Income Child Benefit Charge, the withdrawal of Tax-Free Childcare, or the penalties for unavoidable or inadvertent pensions annual allowance breaches.

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