MARTIN Lewis has warned one million people could be owed THOUSANDS in cash – can you reclaim?
The Money Saving Expert has urged anyone with an outstanding student loan to check if they are entitled.
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He explained a Freedom of Information request into the Student Loans Company revealed over one million people overpaid in the 2022 to 2023 tax year.
“And as there’s no back-date to how far back you can reclaim, there are a lot of people out there who may be due money,” Martin added.
There are three main reasons why people are owed money, according to the expert.
THRESHOLD ERRORS
The main problem occurs when former students begin paying back their loans when they don’t actually earn enough.
“For most people, that threshold is just over £27,000, although depending when you started university, in which UK nation, it might be over £22,000,” explained Martin.
He highlighted that payroll systems will recognise if you earn a certain amount per month that would total the threshold per year,
But, if you don’t earn above the threshold every month, or only work six months out of the year for example, the system will still take a percentage to repay your loan.
This error could also occur if you earn more one month from a bonus or worked more shifts than usual.
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Martin continued: “It gets complicated here; but in the event that you paid too much in individual months, but you earned over the threshold for repaying in a year, you can’t claim back.
“So this is only for people who, in total, earned under the threshold in a year.”
WRONG REPAYMENT PLAN
In other cases, some people have been put on the wrong student loan repayment plan.
The money saving whizz explained: “The Government tells firms if they don’t know which plan you were on to default to Plan 1, which is where you start repaying over £22,000.
“Yet millions of you, the majority, are on plans where you pay over £27,000. So, if you earn £24,000 and you were on the default, you would have repaid when you didn’t need to do so.”
He urged former students to check which plan they are on by asking their company or looking at payroll statements.
EARLY REPAYMENT
Martin informed those with student loans they are only eligible to pay back from the April after they leave university.
“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,” he explained.
“And again, you can get that money back too.”
SHOULD YOU RECLAIM
The Money Saving Expert urged anyone who has overpaid to reclaim because these loans could be wiped after a certain amount of time.
He said: “Now, for most people that’s after 30 years but it really does depend where in the UK you are and when you started university – there are 10 different variants; for some people it’s 25 years, for some people it’s when you’re aged 65.”
Martin explained only 20 per cent of people on Plan 2s, in England and Wales, are likely to clear their loan.
“So, you will still have money remaining on your account. In which case, unless you were going to make voluntary overpayments, for most people, the fact that you’ve overpaid won’t actually reduce what you pay in future,” he added.
HOW TO RECLAIM
Martin confirmed there is no time limit to reclaim an over payment.
The process will involve collecting old payslips, your payroll number and PAYE reference number.
You will need to contact the Student Loans Company (SLC) on 0300 100 0611 (for Wales it’s 0300 100 0370 and +44 141 243 3660 from overseas).
“And you just tell them that you think you overpaid,” said the MSE.
“If you don’t have those, I’d get in touch with them anyway, it just slows the process down.”
And, if you are reclaiming on the grounds of an incorrect repayment plan, it is important to check with your employer beforehand.
This comes as Martin Lewis also shared his top tips on how to slash compulsive spending – and it could save you hundreds.
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And, the MSE offered his “golden rules” for anyone with a savings account and how taking action could make you hundreds.
Plus, Martin issued an urgent warning to anyone with a credit card – and it could save you £1,000s.
