MARTIN Lewis has warned millions of Brits could be owed money after paying the wrong amount in their student loan repayments.
The Money saving expert has urged anyone with an outstanding student loan to check if they have been paying the wrong amount.
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A freedom of information request he filed found that a million people overpaid their loans in 2022/2023 in that year alone.
He posted a video to social media earlier this week which he said “went viral” helping Brits with their loan repayments.
He’s now followed it up with a segment on his ITV show tonight explaining four ways that those with student loans could be paying the wrong amount and whether they could reclaim cash.
Lewis teed off on how loan repayments are communicated, referring to loans as a “graduate tax” that had become a “political football”.
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WRONG REPAYMENT PLAN
This problem affected 165,000 last year and hits those when they have been placed onto 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 uni 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.
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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.
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 thy 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 a bonus or if you worked more shifts than usual in one month.
It could lead to overpayments of hundreds of pounds, Martin warned.
MONEY DEDUCTED AFTER LOAN 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.
EARLY REPAYMENT
Martin also warned that people don’t have to start repaying student loans until the April after they leave university.
He told viewers: “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
The Money Saving Expert urged anyone who has overpaid to reclaim because these loans could be wiped after a certain amount of time.
Most people have 30 years but it depends on where you are in the UK and when you started university.
Only 20 per cent 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
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.
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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).
But, Lewis said due to his social media post earlier in the week, a new form had been created called the SLC Refund Request form to help with demand which can be found online at gov.uk.
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