A MARTIN Lewis fan has revealed how the expert’s handy tip helped him track down £2,300 in free cash.
In the latest MoneySavingExpert newsletter, a reader named Laurence shared how he reclaimed the cash after reading MSE’s handy guide.
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The freelancer had read one of MSE’s newsletters on student loan repayments late last year and decided to check if he was owed some cash.
Many make student loan repayments automatically as they’re deducted from their wages each month.
But 100,000s accidentally overpay their student loans each year, often without realising according to MSE.
Laurence wrote to MSE after he found he had overpaid £2,300 since he graduated.
He said: “I saw your info on how to get a refund for my student loan repayments if I didn’t earn over the threshold.
“As a freelancer in the TV industry, I thought it was worth a check.
Laurence told the team it had “taken a huge weight off my shoulders”.
He then thanked Martin and his team for raising awareness of the repayments.
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The site submitted an FOI (freedom of information) request for the previous tax year and found over one million university leavers overpaid their student loans.
Laurence isn’t the only MSE reader who has got in touch with the site after successfully getting cash back.
Last year, after Martin did a segment on the issue on his Martin Lewis Money Show, several got in touch to say they’d also had hefty payouts.
One woman received £3,773 back, while another got £900.
Others had £505 and £706 in cash returned to them.
It’s a pretty easy process to check if you might be one of those who could be owed money.
Below we explain who could be affected and how you can check and get your funds.
Why might you be overpaying your student loan?
If you were placed on the wrong repayment plan
The problem affects those who have been placed on to the wrong payment plan.
These thresholds are dependent on when and where you went to university and mark the income amount above which you begin repaying.
For those who went to university between 1998 and 2011, that mark is £22,015.
But for those who went to university between 2012 and 2022, that figure rose to £27,295, meaning they get to keep more of their income.
If your employer doesn’t have your correct details, then you may automatically be placed into the first threshold, meaning you pay more – potentially hundreds too much a year.
This could also be the case for former jobs you’ve worked as well.
If you have/had a variable income
You only need to pay your student loan if your annual income is above the threshold, and if not you pay nothing.
But 833,000 people last year had payments taken from their earnings even though they were below the threshold.
With a PAYE form of deductions, repayment errors can happen if your income is variable throughout the year but higher in some months than the annualised amount.
Despite earning less than the threshold over the whole year, if that one month’s pay is above the threshold, you will have money deducted.
This might happen when, for example, you get a bonus or if you worked more shifts than usual in one month.
It could lead to overpayments of hundreds of pounds, Martin warned.
If money was deducted after your loan was paid off
Tens of thousands of people last year had repayments taken from them after they had fully paid off their student loans.
This is because records are usually only updated once a year.
Overpayments can easily total thousands of pounds.
To avoid overpaying, Martin says those in the last two years of repayments can choose to pay by direct debit, meaning you can ensure you don’t go beyond what you owe.
If you repaid some of your loan early
Martin also warned that people don’t have to start repaying student loans until the April after they leave university.
Last year he told viewers of his show: “So, sometimes companies don’t know when you left university or they have the wrong details, in which case you start repaying when you shouldn’t be repaying.”
“And again, you can get that money back too.”
Should you reclaim?
Anyone who has overpaid should reclaim because these loans could be wiped out after a certain amount of time, Martin said.
Most people have 30 years but it depends on where you are in the UK and when you started university.
Only 20% of people on the second plan, in England and Wales, are likely to clear their loan.
This means they’ll have money left in their accounts, meaning overpaying doesn’t reduce what you pay in the future.
How to reclaim
There is no time limit to reclaim an overpayment, so you can reclaim cash even if it’s from decades ago.
If you believe you’ve overpaid, first check if you’re due a refund by logging into your online account.
If you’re due money back, the Student Loans Company (SLC) says the quickest way to get a below-threshold refund is to fill out its new online refund request form.
You’ll need the following handy:
- Your customer reference number
- National Insurance number
- Date of birth
- The tax year you’re claiming for
You then need to email completed forms to this email address: [email protected].
For all other refunds you can call on 0300 100 0611 (for Wales it’s 0300 100 0370 and +44 141 243 3660 from overseas) to get your refund processed.
When you get through, explain your situation and ask to reclaim the money you’re owed.
If you’re reclaiming because you think you earned under the threshold in a tax year, you’ll need to wait until that tax year is finished.
To make the process smoother see if you can dig out any old payslips, your payroll number, and/or your PAYE reference number.
If you don’t have these and think you may have overpaid, it’s still worth giving it a go, though bear in mind it may take longer.
In addition, if you’re reclaiming because you think you’re on the wrong repayment plan, you should check what plan you’re on with your employer or ex-employer first.
Then double-check this doesn’t correspond with the plan you should be on.
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Meanwhile, Martin Lewis‘ MoneySavingExpert has named and shamed the worst delivery firms according to its users.
Plus, Martin has also warned that millions of workers could be owed cash and should check their payslips.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories.
