Student Loan/Pension


I’m getting in touch regarding a student loan and pension query. Out of naivety and lack of
knowledge when undertaking my studies and during employment I enrolled into a student loan
along with non Shariah compliant pensions.

  1. Student Loan

My first question is related to the repayment of my student loan (SLC). I am employed by a
company and I make automatic repayment contribution to my loan (HMRC to SLC) as I hit
the threshold for repayment.

The SLC have provided me a full balance of monies owed on their page (I have done a
breakdown of the full loan balance that I actually borrowed and the total current balance
including interest that they are charging).

If I continue to work at my company on my current wage, within the next 3 years I will be in
a position where I will have paid the exact loan figure that I borrowed from SLC (excluding
the interest). However, this would mean after the 3 years I will then be making payments
into the interest that has been accumulated over the duration of taking out the loan, this
figure is working out to be around 3-4k alone.

In light of the above, is there any advice you can and offer which would be of benefit in
order to avoid the interest payments or any other options you can suggest going forward?

  1. Pension

I have two separate pensions, both private funded (one with my current company and
another which with my ex employer). After realising both of these are invested in non-
Shariah compliant investments, I have paused any wage payments going into both pensions
after notifying my employer. Although as things stand the balance in the pensions is still
being invested in non Shariah investments and having looked at the pensions investment
factsheet, there are no other pensions I can switch to which are offered by the company that are
Shariah compliant.

I have done a breakdown and have calculated the halal value which has been invested into
the pensions, i.e. (exact employer and exact employee contributions excluding the
investments profits from the beginning of the pensions) therefore I’m able to distinguish
between the halal and non halal total value.

a) Is there any advice or options you can advise going forward in the best way of moving
these to a Shariah compliant pension or other suggestions that would be beneficial?

b) Can the non-Shariah invested pension money be used to pay off the interest money
generated from the student loan?

Apologies for the lengthy query.

@Mufti_Faraz_Adam @Mufti_Billal Salaam. Are you able to offer any advice? Jzk