Leading money guru Martin Lewis has told Brits ‘this is big’ as he’s urged those who fit a certain criteria to check if they are eligible for a reimbursment now
Martin Lewis is urging anyone who is still paying off their student loan to do some digging as up to five million people in the UK could be eligible for a refund.
The finance guru has shared exactly why you might be overpaying on your loan without realising, and what to do next. And it turns out there’s plenty reasons you might be one of the lucky ones who are due reimbursment.
Speaking on The Martin Lewis Money Show, the expert explained that the most common reason for overpaying is when you’ve not actually earned enough in that tax year to meet the minimum threshold, which depends which repayment plan you are on.
Your income might have dropped substantially due to things like maternity leave, for example, or you could have started working partway through the tax year or had some time off.
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He also said that university graduates who started working between 2012 and 2022 might be owed money by the Student Loans Company due to an anomaly in how the system operates.
He said: “Now, the rules state, absolutely plainly, you only need to repay the student loan if you earned over the annual threshold in a tax year. What your annual threshold is depends which plan you’re on.”
The cash guru said he would focus on Plan 2 loans, which applies to most people in England who attended university between 2012 and 2022, and in Wales from 2012 onwards.
For those people, the repayment threshold stands at £28,470 annually, with repayments set at 9% of everything above that figure.
Lewis went on to say: “That’s how it works, but PAYE payroll, it takes the money based on your monthly earnings. So £28,470 a year is equivalent to £2,372 a month. You repay 9% of everything you earn above that a month.”
He then gave the example of someone graduating from uni and starting a job in July with a salary of £36,000 per annum, or £3,000 monthly before tax, just a few months after leaving university.
For the remaining nine months of the tax year, until the end of March, you would have to repay 9% of everything above the threshold, which equates to around £56 each month. However, your total earnings for the tax year (April to March) would only amount to £27,000, falling below the annual threshold of over £28,470.
He said: “You earned less than the threshold, you don’t have to repay your student loan. Here are the payments that you made, £508, you can reclaim the £508. This is big, for many people.”
When it comes to getting a refund, there are two ways to go about it, but first off you need to check whether you are actually due a refund. The easiest way to do so is to give the Student Loans company a call on 0300 100 0611 and ask if you are owed anything.
If you are due some cash back, they will tell you how much and organise the refund for you over the phone. Alternatively, you can fill in a refund request on their website if you still remember your log in details.
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